Apple won't have a hard time in 2017, but its golden growth period is over

Foreign media published an article today saying that after a difficult 2016, Apple Inc. (hereinafter referred to as "Apple") will see better days in 2017. But don't have too high expectations, because Apple's golden growth period has ended.

Any major technology company that performed like Apple has this year would have been sentenced to death by investors and beaten up by critics.

Apple's revenue has declined year-on-year in every quarter this year, setting the worst record in more than a decade. In the first nine months of this year, Apple's revenue was $139.77 billion, down 12.5% ​​from $159.11 billion in the same period last year. At the same time, the company's profits are also declining.

As for the core products such as iPhone, iPad and Mac, their sales are either declining or demand is weak. The only bright spot is in the "Services" category, where revenue continues to grow thanks to Apple Music music service and App Store retail store.

The Apple Watch isn't doing too badly, as many users are waiting for the new product to be released in September. The MacBook Pro laptops launched this fall have Apple fans wondering: Is it worth the price? Will Apple continue to develop the product?

In addition, Apple is facing a huge fine. The European Commission ruled in August that Apple illegally evaded $14.5 billion in taxes in Ireland and now has to return this part of the taxes to the Irish government.

In addition, Apple also cut the scale of its mysterious electric vehicle project this year; the new US President Trump also accused Apple of manufacturing products overseas.

Stock price rises

Despite this, Apple's stock price has risen nearly 10% so far this year.

Industry insiders said that this unexpected stock price performance highlights investors' confidence in Apple's management and corporate culture, and also benefits from the goodwill Apple has accumulated among its "fan" groups over the past decade.

But the question now is: How long will investors and users’ patience last?

There’s no doubt that Apple is making big bets in some of its businesses. In fiscal 2016, which ended Sept. 30, Apple increased its research and development spending to $10 billion, from $8.1 billion the previous year and $6 billion in 2014. While that still lags behind Microsoft , which spent $12 billion on research and development in its most recent fiscal year, the gap is closing.

There are reports that Apple is working on artificial intelligence (AI) and may eventually launch an augmented reality (AR) or virtual reality (VR) product. There are also reports that Apple is developing electric cars, upgrading the Apple Watch, and developing a new iPhone for its "10th anniversary."

2017 turned for the better

It is almost certain that Apple will not have such a bad year in 2017 as it did this year. Thanks to the outstanding performance of iPhone 6 and iPhone 6 Plus, Apple's overall performance in 2015 was very strong. Therefore, in 2016, which is about to end, Apple faces a difficult "comparison". In 2017, I believe that Apple's revenue will at least be the same as this year, and it is very likely to be higher than this year.

IDC predicts that global smartphone sales will remain flat this year and will grow in 2017. Next year, Apple will have to fight for market share because it is currently facing severe challenges in the Chinese market. In addition, Apple has also invested heavily in the Indian market, hoping to replicate its success in the Chinese market and drive iPhone sales growth.

In terms of services, Apple is expected to continue to perform well next year. Although sales growth is slowing, the ubiquitous iOS devices will continue to gain popularity. Apple Music has already hit Spotify hard with its growing user base. Whether Apple can attract more current users to use more services (iCloud, Apple Pay, App Store, etc.) next year will determine the revenue trend in 2017.

Even if Apple launches new product categories next year (unlikely), don’t expect Apple’s product line to change radically in the short term. Instead, Apple has entered the “incremental era” and will continue to upgrade current products and services rather than launch new categories.

For Apple (because it is Apple), this "incremental product upgrade" model will allow the company to survive for many years. Under this model, Apple will continue to be very wealthy and have sufficient financial strength to buy back shares and pay dividends. Apple will not change much.

But it is clear that Apple's golden age of rapid growth is over. Let's wait and see where Apple will go next.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.