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What to Expect From Apple In 2016

By Andrew Tonner - Jan 13, 2016 at 5:27PM

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As Apple looks to rebound from its surprise stock market loss last year, here are the product storylines -- both certain and uncertain -- that investors will want to watch in 2016.

Despite recent questions about the strength of iPhone 6s sales, tech giant Apple (AAPL -0.07%) remains the top tastemaker in consumer tech. Even despite threats from competitors both laughable and credible, Apple's product decisions still send ripples through the tech industry as no other company's can.

As a result, tech investors devote huge amounts of time and resources in their attempts to figure out what may or may not be coming through Apple's secretive product pipeline. As we look to Apple in 2016, let's review what the year ahead could hold for Apple's product lineup, both the expected and unexpected.

The sure things
Apple tends to refresh most of its core hardware and software products in regular, predictable intervals. So we can virtually guarantee that Apple will release updated versions of the iPhone, iPad, MacBook, Apple Watch, iOS mobile software, and OSX desktop operating system at a bare minimum.

As these products in aggregate produce almost all of Apple's annual profits, in addition to their industrywide influence, let's also briefly drill down on some of the potential updates and innovations most closely associated with each of these products.

Source: Apple.

iPhone 7: As the product that drives the majority of Apple revenues and profits, the iPhone and its biannual form-factor overhaul will probably be the defining driver of its shares in 2016.

Perhaps the most consistent iPhone 7 and 7s rumor has focused on the devices' thinness. Apple is reportedly designing its new iPhones to be so thin as to possibly eliminate the current 3.5mm headphone jack to favor headphones that connect either via Bluetooth or its Lightning charger port. Apple tends to anchor each year's iPhone upgrade on a single marquee feature, and given the increase in thickness with the iPhone 6s, developing what would be by far Apple's thinnest iPhone ever (can you hear the marketing pitch already?) could create an appreciable wow factor among its hordes of loyal fans. Expect the customary upgrades to Apple's A-series chips and the like as well.

Apple is also widely expected to release a smaller 4-inch iPhone model that many are referring to already as the iPhone 6c. The device would serve as Apple's entry iPhone, an important strategic device as it expands deeper into emerging markets such as China and especially India.

Source: Apple.

iPad: Apple further bifurcated its tablet lineup last autumn with the addition of the 12.9-inch iPad Pro, a device whose launch has largely overshadowed the rest of Apple's $20 billion-plus tablet business.  Apple is widely believed to have an updated iPad Air 3 in the works, but few have a clear sense of what upgrades it specifically might enjoy aside from the usual chip and screen resolution improvements. We'll have to wait for more details to emerge.

Mac/MacBook: Analysts widely expect that Apple will upgrade virtually all of its computer lineup to Intel's new Skylake chip architecture, which promises meaningful improvements to processing speeds, graphics performance, and battery life in Apple's laptops. The consensus belief is that Apple doesn't have any earth-shattering design plans up its sleeve for its computing division. However, the performance enhancements that should accompany a shift to Intel's Skylake should help keep Apple's computing division ahead of the pack.

Source: Apple.

Apple Watch: The rumor mill has been quiet on what Apple might have up its sleeve for its second-generation Apple Watch. Though rumors of a coming switch to so-called "smart bands" could help the form factor delve far deeper into its big-ticket health-tracking potential, expect at a bare minimum better battery performance and improved outdoor screen visibility. A March release event has also been widely circulated.

To be clear, while investors can confidently expect Apple to refresh each of these products, the specifics I've talked about might not happen. However, given the amount of time and dedication both fans and analysts alike devote to peering into Apple's product pipeline, a surprising amount of these rumors do ultimately prove accurate. Now, let's look beyond the likely to the possible game-changers Apple has also been rumored to have in development.

Important, but don't hold your breath
According to reports, Apple has a number of potentially industry-redefining products currently in development. And while it appears unlikely any of those products will make it to market in 2016, their potential to add meaningful growth to Apple's financial performance makes them nevertheless important stories for investors to follow.

Source: Apple

Project Titan: Apple's secretive efforts to develop its own automobile are perhaps the most important story for the tech giant. With names such as Tesla Motors, Alphabet, BlackBerry, and the bulk of the automotive industry all focusing on the space, driverless EVs will be the future of transportation. Apple has reportedly accelerated its efforts to disrupt this $2 trillion annual industry, but its Project Titan is expected to arrive no sooner than 2019.

Apple's TV service: Rumors of Apple's long-held desire to release its own over-the-top "skinny" cable bundle have followed it for years. And as a company that both insists on owning the entire user experience and sees meaningful room for improvement over current offerings, Apple probably still wants to disrupt the cable industry. However, even after Apple's resounding triumph over the music industry, the major content and cable companies have been hard for Apple to herd. After negotiations once more broke down, Apple reportedly shelved its plans for such a service in late 2015. So while Apple probably still wishes to eventually launch such a service, I also wouldn't hold my breath anticipating that 2016 will see its release.

This is just a taste of the innovations the world's largest tech company might have in store, as Apple enjoys numerous additional product opportunities in 2016 and beyond. The company has both ample financial and product-driven reasons to believe the year ahead will be its best yet.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Andrew Tonner owns shares of Apple. The Motley Fool owns shares of and recommends GOOG, GOOGL, AAPL, and TSLA. The Motley Fool recommends INTC. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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