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March 30th, 2016

What’s Happening at Apple?

With Apple absent at CES and MWC and with their big event (WWDC) not taking place until summer, here’s a quick update on what’s going on in the Apple camp- including the iPhone SE and 9.7 inch iPad Pro launch event on the 21st of March.

Has Apple Stopped Innovating?

There’s been a lot of media articles and comments about lack of new products and innovation coming from Apple in the past year (or since Steve Jobs passed away). However, the frequency of product and service releases has actually increased substantially over the past couple of years with the introduction of Apple Watch, Apple Pay and Apple SE. Are they big new innovations? Maybe not, but nor was the first iPhone. The challenge for Apple is that expectations are higher from consumers, investors and media and over time it will impossible to meet these. Below is a summary on the progress and predictions some of the key mobile innovations in 2016.

iPhone SE

Apple announced the iPhone SE last week. The device is an upgrade of the iPhone 5S with a 4-inch screen and prices starting at $399. We think the smaller and cheaper iPhone will be a hit globally with predictions of 15M phones sold the first year and $6Bn in additional revenue for Apple. As a matter of fact, CNBC claims that Apple already has 3.4M pre-orders in China.

Read more about the iPhone SE here.

9.7 Inch iPad Pro

Tablet sales may have slowed down, but the device category is still a success amongst consumers. The big difference versus smartphones is that tablets have a much longer life span with many people still using the iPad 2 from 2011 five years later. Apple still leads the category with approximately 24% market share with Samsung, Amazon, Lenovo and Microsoft closing in.

Should you buy the 9.7 Inch iPad Pro? Here are all the details from Ars Technica.

Apple Pay

We wrote about Apple Pay several times last year including our guide to mobile payments and latest stats on Apple Pay. So far our predictions have been right in terms of slow adoption for in-store payments. Apple Pay simply doesn’t solve a customer problem yet. However, with Apple planning to support web payments we will see continued strong growth online in 2016 and with this, continued slow adoption of in-store payments.

PYMNTS provides a great overview of Apple Pay adoption for anyone interested.

Apple Watch Updates

Success or failure? With 5.1M watches sold in Q4 2016 (versus 7.9M for the 500-year-old Swiss watch industry), $1.5Bn in revenue or 63% of the total smartwatch market, you can’t exactly call it a failure. IDC predicts 14M Apple Watch will be sold in 2016. However, compared to 225M iPhones predicted to be sold during the same period (Piper Jaffrey), it’s still not a mass market product. And more importantly it’s only a 20% increase versus the 11.6M estimated to have been sold in 2015.

Will there be a Watch 2 this year? There is a chance that it will be announced at WWDC or in September.

iOS9 Upgrades

The OS updates are extremely important as they drive the app eco-system, hardware requirements, browser standardization and much more. Therefore, adoption of new OS versions is key to the development community. Compare the one major OS release per year to HTML5 standardization which has taken over 10 years.

iOS9 is now on most iPhone devices with 3/4 of all Apple smartphones running iOS9. This means that we can focus most of our energy on compatibility with the latest release although support for iOS8 is still required until the end of 2016. See the latest stats on OS usage here.


Has Apple lost its ability to innovate? No, but innovation may look different than what it used to. In the smartphone space it may be more incremental for a year or two before the next big thing. For computers and tablets it will mean hundreds of smaller enhancements to the hardware.

Apple is usually not a first mover which means that it may take them a while to move into e.g. VR and AR wearables, but when they do it will be with a big splash. In the meantime the greatest improvements will be in the software with thousands of enhancements and new features every year such as HealthKit creating new opportunities for third-party developers.

Magnus Jern,
President DMI International

Tags: iOS ipad iphone trends

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