Biggest problems facing Apple in 2017

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". It doesn't have anything to do with defending or apologizing for Apple, but with championing Apple customers, who get pelted with so much noise week after week it becomes almost impossible to separate the real problems from the sensationalized ones. And Apple has real problems.

Some of them are similar to those from year's past. Others are new or escalating this year. None of them are spell immediate doom for a company with billions in the back, 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. Platform stability vs. shipping timely updates.

I'm going to pick five to focus on for now, though: The five I think deserve particular attention to in 2017.

Shipping

"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. We've had products come in late, like AirPods. And we've had products not come in at all, like desktop Macs this year.

Sometimes it's the result of inaccurate demand forecasting, of higher 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 the products to their full potential, 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, it 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. They're what the most demanding customers — including customers inside Apple — use to make sure everything else ships on time.

Yet Mac Pro hasn't been updated since 2013, Mac mini since 2014, and iMac since 2015. It's tempting to call that "embarrassing" 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".

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. And 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's easy to ignore but, if ignored, it could undo a lot of the hard-won gains of the last decade.

Services experience

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 their software and silicon, Apple's even ahead of their more popular competitors. 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. Jony Ive is tight with his design team, Craig Federighi manages three levels down. And Phil Schiller'd org has eyes on everything.

On the services side, though, it often feels like no one is paying the same level of project-management attention. Eddy Cue's duties are far too numerous and diverse, from making content deals to hosting festivals to keeping servers running. There's a great team under him but there's no high-profile, public-facing VP of services experience whose only job is to make sure all day, every day, everything from Siri to Maps to Music is an amazing experience.

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 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.

Perception

This ties the previous problems together magnifies them: It's become clear Apple no longer enjoys a reality distortion field when it comes to media or social network perception. If anything, the opposite is now true. Google and Amazon get given every benefit of the doubt these days while every Apple benefit is doubted.

Part of it is simply the equal and opposite effect of Apple's success. The only thing people like more than an under-dog story — like the Second Coming of Steve Jobs — is a tear-down — like Apple is Doomed.

The other part, though, is Apple's messaging — or lack thereof.

Traditionally, Apple has often been good at making the case for new products and new product directions. Last year, though, the Smart Battery Case had no case made for it at all, which led busy or disinterested reviewers to dismiss it out of hand. This year the loss of the headphone jack and the going all-in on USB-C didn't get any messaging that crystalized the advantages, leading to significant pushback.

Extreme focus is only a perspective-shift away from tunnel vision. More and new product categories is only an angulation away from loss of attention.

Given the current perception, Apple can't afford to leave anything ambiguous in 2017. Every product has to have a great story, and every great story has to be amazingly well told.

What's NeXT

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?

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