Apple had some real problems in 2016 and, if the company wants to stay at the peak of relevancy, they’ll have to start addressing them in 2017.
It feels like I spend most of my time these days knocking down manufactured controversies or “fake tech news”. I do it because we get pelted with so much noise week after week it becomes almost impossible to separate the real problems from the sensationalized ones. And Apple, like any big company, has real problems.
Some of them are similar to those from year’s past. Others are new or, in my mind, newly important. None of them are spell immediate doom for a company with billions in the back, of course, but any or all of them could become critical to Apple’s sustained relevance over the next decade.
Retention remains one of them. So is the scalability of the organization. The diversity of the board and the company. The stability of the various platforms. And so on. I’m going to pick four to focus on for now, though: The five I think deserve particular attention to in 2017.
“Great artists ship” was a favorite saying of Apple’s late co-founder, Steve Jobs. Logistics and supply chain management are skills Apple’s former COO, now CEO, Tim Cook, and current COO, Jeff Williams have taken to near-legendary levels.
Yet for the last little while, Apple has been plagued by supply problems. We’ve had products come in hot, like iPad mini and Apple TV. We’ve had products come in incredibly constrained like Apple Pencil, iPhone SE, iPhone 7 Plus, or Apple Watch Series 2. And we’ve had products come in late, like AirPods.
Sometimes it’s the result of inaccurate demand forecasting, of higher component constraints or lower yields than expected. Sometimes it’s because of last minute issues or of changes to materials or manufacturing processes. Sometimes it’s just about resources and priorities.
Whatever the cause, it means Apple can’t sell as many of the products as they otherwise would, which is bad for Apple. Worse, people can’t buy them in a timely fashion, which makes for a terrible customer experience.
Satisfaction levels are still tremendously high, so once people get the products, they like them. It’s just the getting part that needs work.
Apple has always been a company with an incredibly focused product lineup. Once upon a time, that was just the Mac. Now it’s iPhone and iPad, Watch and TV, accessories and AirPods.
iPhone still ships on time — it has to — but it would behoove customers if Apple figured out how to forecast and fulfill all the other products in a timely manner as well.
The horn effect
Apple makes more money from iPhone in a month than they make from Mac all year. Apple also sells far, far, ludicrously far more notebook Macs than desktop Macs. As customers, we’re literally voting with our wallets that all we want from Apple is more and more mobile.
That doesn’t mean desktop Macs aren’t important, though. They’re not just the trucks in Apple’s fleet, they’re the trucking industry.
Yet Mac Pro hasn’t been updated since 2013, Mac mini since 2014, and iMac since 2015. It’s tempting to simply file that under problematic as well but, since Apple’s last major updates also made all of those computers into computing appliances, unable to be updated by the average customer, a better word is “unacceptable”. When you take away someone’s ability to do something for themselves, you take on the absolute responsibility of doing it for them.
Likewise, Apple is still making Magic keyboards, mouses, and trackpads, at least for now, but they’ve gotten out of the display business and, rumor has it, they’re getting out of the router business next.
So, we’re approaching a world where, if you want to get a high-end computer, display, or router, you have to get it from a company other than Apple. That’s been the case with gaming and printers for a while now, but once you start adding video production and routers, and other industries and peripherals, there’s an increasing chance it snowballs.
Once you start getting things from a company other than Apple, it’s easier to get the next thing from that other company, and the next thing. Eventually that could include notebooks and, yes, even phones.
The halo effect helped build out from iPod and iPhone to full-on ecosystem that provides far more value than the sum of its parts. The horn effect could do the opposite. It could begin to break apart a lot of hard-won gains Apple’s made over the last decade.
Much of 2016 was wasted worrying about Apple being behind in Artificial Intelligence and Machine Learning. But Apple’s been doing both, quietly, for years. In some ways, thanks to owning their own silicon, Apple might even be ahead. Where Apple has been falling down, though, is in services experience.
For traditional products, Apple is famous for sweating every detail from the packaging to the pixel. Design paints the back of the fence. Software engineering is managed three levels down. Services, though, has had to transform from content contract negotiation and file delivery to a range of businesses vaster and more complex than perhaps any other organization.
And it needs to adopt some of the culture of the traditional software and hardware divisions to cope with it. Including, I’d argue, a high-profile, public-facing VP of services experience whose only job it is, day in, day out, is to make sure everything from Siri to Maps to Music is delightful.
None of the complaints made by major news outlets about silly Siri omissions this year should have been discovered by journalists. No Apple Music edge-cases should have curled Dalrymple’s beard. All of it should have been found and fixed first by a team lead by a services VP whose only job is to make sure exactly that stuff is found and fixed first.
In 2016, Apple finally gave us a dedicated VP of App Store, something I’ve been wishing for for years. In 2017, I’m hoping we get a VP of services experience as well. And one smart and powerful enough that it’s near-instantly apparent.
20 years ago Apple hit a brick wall. The technology that had birthed the Mac would take them no further. And so they bought NeXT, got Steve Jobs back, and charted a course for the next two decades. That gave them macOS (née OS X) and, eventually, iOS, watchOS, and tvOS.
Another brick wall approaches, though. (It always does.) iPhone, iPad, Apple Watch, and Apple TV are all riding high right now, but there’ll come a point where the technology behind them reaches its limit and can take them no farther. (It always will.)
What then? It’s doubtful there’ll be another NeXT to buy. That means Apple has to prepare its own next NeXT.
This might not be a concern. Modern Apple is great at obsoleting themselves and it’s quite possible Swift, Apple File System, and some of the other things they’ve been working on could combine, step by step, year over year, to eventually rejuvenate everything.
But the recent ups and downs with the rumored Project Titan could also show that Apple isn’t looking as far forward as they could. My biggest hope for Titan was never a car but for new processes and technologies that could lead to many new products over the next decade. Now it looks like that won’t be happening, at least not there, and it’s uncertain what the others opportunities there will be for that kind of incubator.
NeXT and a few other key technologies and insights perfectly positioned Apple to ride the mobile revolution into unprecedented success. Another revolution will come, not just in AI or AR but in the core technologies that power them. And Apple will need the next NeXT, and the the next big insight, to ride that next wave.
Your biggest challenges?
Those are five of the biggest challenges I see facing Apple in 2017 and beyond. What are yours and how would you like to see Apple tackle them?