Despite a rip-roaring 2015, something peculiar happened this month: Apple’s stock value dropped to below $100 for the first time since October 2014.
That was down from a high of just over $132 last May.
On the one hand, we’re expecting an amazing Christmas with record-breaking revenues, yet again.
But it’s Apple’s guidance for what to expect in the months to come that investors will be eagerly awaiting. It’s here where the company outlines its worries, the issues that keeps it awake at night.
According to the latest figures Apple has shared – from October – sales of the smartphone make up 63% of the company’s entire revenue. That’s before you factor in all the people who then go on to buy apps, subscribe to Apple Music, and do any number of other things with their phone from which Apple takes a cut.
Its other major products don’t even come close. The Mac range has bucked a huge industry-wide decline but still only accounts for 13%. The iPad, meanwhile, represents 8% – though this may get a boost thanks to the recently launched iPad Pro, the bigger version that comes with a keyboard and little stylus.
Apple’s major new product of recent times has been the Apple Watch. Yet we’re still none-the-wiser about how successful that has been, as its performance is lumped into the “other” category, which includes sales of the iPod, Beats headphones and various other things.
Collectively, the “other” products were worth 6% in total.
The watch will have likely been a good performer at Christmas, so Apple may begin to shed some light on how well it is doing. But we’ll have to wait and see.
The reliance on the iPhone is what worries investors most. Apple has plenty of repeat business – once hooked in, data shows people are far more likely to stick with Apple than change to another brand like Samsung – but it’s now seeing a plateau when it comes to bringing in new customers.
Trying to predict Apple’s future is a dangerous habit.
It rarely ends well – just ask ex-Microsoft boss Steve “the-iPhone-is-not-a-good-email-machine” Ballmer. And everyone at Blackberry. And Nokia.
But speculate we must, and here’s a summary for what investors and analysts think could happen in 2016.
- The iPhone 7 will come out – possibly without a headphone jack – and give iPhone sales a massive kick. (And perhaps headphones sales too, come to think of it.)
- A new budget iPhone — called the “5E” – will hit the developing world. This may be a prime product for markets like India where, we learned this week, the company has applied to open up its own-brand stores too.
- China will become even more important and show little sign of slowing down, at least where Apple is concerned.
- A big acquisition will provide an express route for Apple into a new area. Apple investor Daniel Ives told the BBC that buying Netflix, for one example, would “get Wall Street the most excited”.
Neo Monitoring Desk