Why 2016 may not be such a bad year for Apple after all
If you are an individual who tends to take things at face value, you could be forgiven for thinking that technology giant Apple had experienced a disappointing start to 2016. Firstly came talk of declining sales growth, for example, with an increase of 3% from 2014’s figures the lowest rate in a decade. Sales are also expected to fall slightly for the first time since the launch of the iPhone in 2007, offering Apple a major strategic challenge that requires huge consideration.
More recently, it was also revealed that Alphabet (the parent company of search engine giants Google and YouTube), had surpassed Apple as the world’s most valuable company. In terms of earnings, shares and market value, Alphabet developed a net worth of $568 billion during the last financial year, while Apple’s came in at an estimated $535 billion.
The Truth about Apple: May things may not be as bleak as they seem
While these hardly sound like positive portents for Apple, they must be considered in a wider context. Apple remains an extremely profitable corporation, for example, and one that sits at the cutting edge of smartphone, tablet and desktop technology. It also reported incredibly impressive first quarter fiscal results for 2016, delivering quarterly revenue of $75.9 billion and a net income of $18.4 billion during the same period.
This figure of $18.4 billion is the single largest ever recorded by a public corporation during one quarter, while it also enabled Apple to beat a record that it first set during the same period in 2015. This hints aggressively at impressive growth, even allowing for the fact that the sheer rate of expansion may have declined over the course of the last 12 months (and will continue to do so throughout 2016). Rather than looking at this as a decline, we should instead consider it as a challenge that has been triggered by social and market trends.
More specifically, it is estimated that more than one billion Apple-branded devices have been sold, including everything from iPhones and iPads to Macs. This represents the equivalent of one-seventh of the global population owning an Apple device, while it also hints as the type of market saturation that would trigger sluggish growth for any brand. In other words, Apple has become the victim of its own immense success and must consider new strategies to continually grow, especially in the fields of mobile gaming, gonebingo’s online bingo and app store development.
This demands evolution not revolution, as the brands’ existing resources and technological expertise mean that drastic action is not required if it is to remain as a market leader. Rather than attempting to reinvent itself, Apple must simply focus on diversifying its existing product lines (and all future upgrades) while also timing the release of any new products strategically. If it can achieve this, the fruits of such a strategy may become apparent in the autumn when the iPhone 7 and the second generation Apple Watch hit the consumer market.
Dave has over 20 years experience in the digital industry, and is founder and editor of Geektown. Obviously a huge geek himself, he can often be found in front of the latest tv show or movie, on various video games, or with his head in a comic book.