Will there be any gadgets that inspire a technological revolution?
Apple released a boatload of things in 2017, and in typical Apple fashion, it made a lot of money doing so.
Most of these things weren’t surprises. We got a new Apple Watch and Apple TV that look and generally act like the previous models; a differently sized iPad Pro; expanded Mac computer lines (one now comes in black!); and two smartphones that are nearly identical to the iPhone 7, and a third that costs $1,000.
In a word, the year was pretty boring.
While nothing was particularly revolutionary, nothing was particularly terrible, either. Analysts had been expecting the company’s product launches to trigger a “supercycle” of sales over the year, but so far, it seems that Apple’s revenue and profits were generally in line with the last few years.
Whether that will change with iPhone X and holiday sales remains to be seen, but what does Apple have in store for 2018? Will there be any new aluminum-clad gadgets that will inspire another technological revolution like the iPod or the iPhone did, or will we see another year of iterative updates to existing product lines? Here’s what might be ahead in 2018.
One thing that’s almost certain to be released in 2018 is the HomePod, Apple’s smart-speaker answer to Amazon’s Echo and Google Home. When it was announced at Apple’s developer conference in June, Apple expected to ship it in December. The company has since said the device will ship in early 2018. The $350 speaker, which is roughly $300 more expensive than the cheapest smart-hub offerings from Amazon and Google, will be focused more on playing music than controlling other IoT devices, answering general questions like Echo and Home. Apple has a lot of ground to catch up on the still-growing field; estimates suggest that Amazon has already sold over 15 million Echo devices. Apple has a lot to prove with a $350 device if it’s going to match or outgun Amazon and Google. Apple has a lot to prove with a $350 device if it’s going to match or outgun Amazon and Google.
With the iPhone X, 8, 8 Plus, and SE, Apple put more new models of smartphones on sale in 2017 than ever. Reports suggest this trend will continue in 2018 with three iPhone models that look like the current X, but in sizes that match the 8, 8 Plus and X. There’s also talk of a new miniature SE model, meaning Apple could continue to attract a wider range of customers with new devices that start at about $350 and continue up to over $1,000.
Analysts expect Apple to release an updated version of its AirPods wireless headphones in the second half of 2018, according to 9to5Mac. There’s not a lot of information about how they’ll be different, but analyst Ming-Chi Kuo at KGI Securities suspects Apple will ship over 26 million units next year, double the number of 2017. The new AirPods will likely have a case that can charge wirelessly, as Apple announced this at its iPhone event in September. Which leads us to…
In September, Apple also showed off a new type of wireless conductive charger that can charge multiple devices at once, including an Apple Watch, an iPhone, and AirPods in a new case. Although Apple has stated that its new phones have glass backs because it’s far easier to charge wirelessly through glass than through metal, it’s possible that we could see more Apple products that can charge wirelessly in the future. Many competitor smartphones use plastic on their backs (which is also fine for conducive charging), so perhaps we’ll see Apple incorporate cable-free charging into its iPads and Macs in the near future, bringing the company one step closer to its seeming goal of producing perfectly hermetically sealed slabs of glass and metal.
Apple introduced the “TrueDepth camera system” on the iPhone X, which is essentially a series of cameras and sensors that map and recognize a person’s face in intricate detail. It uses it for FaceID, its security technology that replaces the fingerprint-based TouchID that’s been on the last several generations of iPhone. It doesn’t always work perfectly, but it’s often speedy, and would be a useful way to log in to other Apple devices, like iPads and Mac computers—all of which have front-facing cameras already. Many pundits have called for Apple to embed the technology into forthcoming Apple products, and considering how TouchID proliferated to iPads and then MacBook Pros, it seems entirely possible that this is something Apple will do on some of its new products.
Apple has been heavily hinting that it plans to delve further into the medical wearables, beyond its work with the current Apple Watch. Some have suggested that it intends to develop a separate device to provide more real-time heath insight and monitoring for people who need it. It’s worked with the US Food and Drug Administration (FDA) to better understand how to develop software for medical purposes. Third-party add-ons for the Apple Watch, such as the AliveCor KardiaBand, which tracks heart health through an EKG sensor, have already gotten FDA approval to send information from an Apple Watch to the wearer’s doctor.
Next year may be when Apple moves from being an ancillary player in the medical field to one that is carving out a slice of the $2.7 trillion the US annually spends on healthcare. “There’s much more in the health area. There’s a lot of stuff that I can’t tell you about that we’re working on, some of which it’s clear there’s a commercial business there,” CEO Tim Cook told Fortune in September. “I do think it’s a big area for Apple’s future.”
Apple has been working on autonomy and cars for a few years, with no discernible end goal. A one point, reports circulated that it was working on a rival car to Tesla, then reports said the project had been scaled back. Apple has admitted it’s working on some autonomous technologies: It filed a registration as an autonomous-car testing company in California in April, and published research online in November.
“It’s a core technology that we view as very important,” Cook said, calling autonomy “the mother of all AI projects,” in an interview with Bloomberg in June. He confirmed, for the the first time publicly, that Apple is working on “autonomous car systems,” rather than cars themselves. While still tight-lipped, Apple has been more vocal about its medical and autonomous research than it has about other technologies in the past. Perhaps it’s getting us ready for a world where Apple carOS runs on autonomous vehicles. We may learn more about its ambitions in 2018 as car companies widen their tests of self-driving vehicles throughout the year.
Apple has been working on smart glasses that overlay information on the real world for a little while now, but other than a few leaks of potential prototypes out of its manufacturing facilities in Asia, little information has been uncovered. Much like medical and autonomous devices, Cook has hinted at AR as a transformational technology. He’s also said AR could be “a great commercial opportunity” for Apple, and reports suggest the company could have an augmented reality product out in the next couple years. Signs point to 2019 or 2020, but perhaps Apple will surprise us with a new piece of wearable tech in 2018, as it did with its AirPods wireless headphones in 2016.
The company also announced the first Macs that are compatible with VR headsets and software in June, so perhaps we may also see Apple delve further into the virtual reality world next year.
What about Apple’s business?
Beyond new products, 2018 could be a pivotal year for Apple’s business. In 2016, the company posted the first year-over-year drop in revenue in over a decade. For 2017 (its fiscal year ends in September), Apple returned to growth, posting revenue of $229 billion, over the $216 billion it generated the year before. But that was still below the $233 billion it generated in 2015, which remains its best year for revenue and profit to date. Will Apple top those heights, or have we hit “peak Apple?”
There are a few signs to look at in the year ahead to determine how healthy Apple’s business is:
China and India
Cook has repeatedly looked to China and India as growth areas for Apple’s business, although neither have come through. The company is launching lower-cost phones, like the iPhone SE, and investing in the regions, in hopes of increasing awareness and goodwill toward the brand. Cook has said that he’s “very bullish” on India, and opened a center to help Indian developers get apps on its App Store in March. Similarly, Apple has invested in Chinese companies, and Chinese energy, as well as research and development centers in the country. China is Apple’s third-largest market, after the Americas and Europe, but in 2015, it was its second-largest. Unless Apple can show why its products—which come at a premium over many Chinese models that do most of the same things—are superior to those of its competitors, it will likely continue to face an uphill battle in these markets.
Apple’s services sector—which comprises its sales of music, games, apps, and movies, as well as AppleCare, iCloud, and Apple Music subscriptions, and Apple Pay fees—has been on a tear in recent years. It’s now Apple’s second-largest business after the iPhone, generating just shy of $30 billion in revenue over 2017.
Apple invested in original programming in 2017, launching two (not very good) shows, Carpool Karaoke, based on the segment from James Corden’s talk show, and Planet of the Apps, a rather tone-deaf knock-off of Shark Tank, but for apps. Mercifully, it hired two Sony TV veterans who worked on hit shows like Breaking Bad, Better Call Saul, The Crown—and, ironically—Shark Tank, over the summer, and a British TV executive in October. Hopefully whatever it produces in the future will be more watchable, and might actually convince potential customers to sign up for Apple subscription services, instead of rivals like Netflix or Hulu. Look to see what other original-content deals Apple works on in 2018 to keep users locked into its ecosystem.
All that foreign revenue
Apple has over $200 billion held in offshore accounts from its non-US businesses that it has not repatriated to avoid paying US taxes. The Trump administration has suggested a tax plan that would create a one-time “repatriation holiday” allowing companies to bring cash back to US shores for a discounted tax rate. Trump has yet to specify what this rate would be, and Quartz’ Max de Haldevang explained why he’s doing this, and whether it will likely work as intended:
As Trump puts it, the money can come back into the economy and “work and work and work.” When Congress tried to do this in 2004, money did indeed come flowing back to US shores; $312 billion in gross revenue. The problem, however, was that most of it was returned to shareholders, rather than being reinvested in the US economy.
Regardless, Apple would almost certainly jump at this chance to bring much of its foreign-held revenue to the US for a low rate. The company has already committed to investing in companies that manufacture products in the US, including the optical components company Finisar and the glass manufacturer Corning, which will likely endear it to Trump and spur him into announcing that holiday sooner rather than later. Whether Apple actually spends more of its billions on new US plants, stores, or jobs, is uncertain, but it definitely would free up funding for some of its more ambitious projects.