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Why Apple's 2016 Was a Mix of Good and Bad

CUPERTINO, CA - OCTOBER 27: Apple CEO Tim Cook speaks on stage during an Apple product launch event on October 27, 2016 in Cupertino, California. Apple Inc. is expected to unveil the latest iterations of its MacBook line of laptops (Photo by Stephen Lam/Getty Images)

It’s hard to look back at Apple’s 2016 and call it a success.

In January, rumors were swirling that this would be the year Apple would release a major iPhone update, all-new Macs, and so much more. There were rumors of Apple’s grand car ambitions, and reports that Apple had some surprises in store.

And then reality set in.

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Apple’s iPhone, the product that generates the vast majority of the company’s revenue, wasn’t the big update the rumor mill had promised. Instead, Apple kept it safe this year, delivering a design in the iPhone 7 strikingly similar to the handsets Apple released in the last two years. In a somewhat surprising move, Apple AAPL decided to ditch the handset’s headphone jack, leaving customers to either buy wireless headphones or use a tiny adapter to send sound to wired headphones. The move was controversial, but with iPhone 7 demand strong, Apple likely views it as a good one—even if some customers are annoyed.

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Apple’s only big update this year came in October with the announcement of the MacBook Pro with Touch Bar. The computer is the first from Apple to integrate a touchscreen above the keyboard, delivering to users additional software functions that correlate to what’s happening on screen. It’s a nice upgrade, but whether it’s enough to move the needle on Apple’s Mac division remains to be seen.

Apple also won some points with privacy advocates after going head-to-head with the U.S. government over its requests to access data stored on the iPhone used by San Bernardino shooter Syed Farook. While the FBI ultimately gained access to the handset without Apple’s help, CEO Tim Cook made his point.

But alas, Apple’s year could be one characterized by more disappointment than anything else. There were no new Macs aside from the MacBook Pro, and the iPhone 7 didn’t quite live up to the hype. Add that to an aging iPad and small improvements to the Apple Watch, and consumers around the world might feel Apple let them down in 2016.

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Shareholders might also feel that disappointment. Apple’s decision to take its foot off the gas was partly to blame for the company’s first annual revenue decline since 2001. Meanwhile, some red flags surfaced in Apple’s financials as iPhone sales started to fall, the iPad continued to tumble, and even Macs failed to perform to the level some analysts had hoped. While Apple’s Services business revenue skyrocketed, the hardware declines made some question whether Apple’s best days are behind it.

Of course, Apple says everything is fine, but it can’t hide the signs of softening that have surfaced. Next year offers new opportunities and new ways for Apple to regain some of its luster, of course, but it’s hard to believe the company wants to relive 2016.

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