Is betting against Apple in 2016 a dumb move?

Apple is undeniably one of the most successful and in vogue companies on the planet. From giving us high-end smartphones to producing the popular virtual assistant Siri, Apple forever continues and strives to get the attention of consumers.

Trying to decipher where Apple is headed is a not a smart idea, as the company loves to wow their customers. Everything is done on a low key. Apple has maintained its stripes in the game by thinking outside the box and outdoing others at every opportunity they get. Even though Steve Jobs, the creative genius passed away back in 2011 that did not prevent Apple from doubling their stocks. Tim cook deserves a lot of the credit, too.

Word has it that the company is facing some challenges, as it remains reliant on the iPhone to boost its revenue. The company plans on selling roughly 231 million units of iPhones to regain approximately 63 percent of its revenue and maybe a few extra bucks for profit, which means the company is now open to vulnerability. A prediction made by Morgan Stanley’s Katy Huberty claims the iPhone will see a fall in 2016 for the first year ever. AAPL had a $132 peak back in May, but it has had a downhill to $106, an approximate 18 percent decline, which is quite disappointing.

According to Ycharts, the ratio of the company’s price to their earnings had dropped to 11.56 from the 17.93 record in February, which is significantly under the five-year average of 14.31. From the look of things, Apple is open to the options of either keeping the sales of the iPhone up or finding another source of revenue altogether, which would be very tough on the company. The idea of growing phone sales by 10 percent (23 million units) would be more than all the phones the company sold back in 2009.

iPhone users also have an issue of not upgrading their older phones. The sales in China have recently doubled, and the company seems to be reliant on that, never mind the slow-paced economic growth. The iPhone 6 presents Apple with a ray of hope, but as time passes, new features will have to be added. Otherwise, people will get bored. The company could update the iPhone 6 and enjoy some gains in this.

Apple does have other ways to generate revenue for itself. They have Apple Music, the Apple Watch, Apple TV, and of course, various apps like the new Kimoji app that literally broke the App store due to major download traffic. The App is still part of the iPhone in a way, so not even all of these could replace the value the iPhone adds to Apple.

Investors are having a scare at the size of Apple’s challenge ahead. The company stands at $600 billion and sports the largest market capacity in the world, which has a lot of potential to grow far more in the future.