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50% of Apple's Revenue Comes From the iPhone
BogenDorpher writes "A new report indicates that 50% of Apple's revenue comes from its iPhone product. Not 5%, not 20%, but 50%. In just three months from December 2010 to March 2011, Apple has raked in a total of 24.6 billion dollars. 50% of that came from the iPhone."
Apple has products other than the iPhone?
What I want to know is how much of that 50% is from hardware sales and what is from app store revenue.
Time to offend someone
the banana phone?
Now more than ever.
A remarkable bit of sleuthing from a Windows blog. Any evidence for this particular factoid?
Faster! Faster! Faster would be better!
Apple is now the largest cellphone manufacturer on Earth by revenue.
Don't blame me, I voted for Baltar.
iPhone alone, or from iPhone apps and accessories as well?
http://arstechnica.com/microsoft/news/2007/04/ballmer-says-iphone-has-no-chance-to-gain-significant-market-share.ars
I know it's kind of laughable right now, but imagine if Windows Phone or Android make a big dent into Apple's iPhone marketshare.
That's 50% of their revenue they are cutting into, at high percentages. Just food for thought folks...
The price is always right if someone else is paying.
How many percent?
Feed the beast sucka's
I think they should buy bellsouth. And if you have an iPhone on a Apple carrier network, then you would be able to get features available in no other way. Maybe the phone could use a special protocol when talking with an Apple carrier. But I guess the cell towers are still privately owned right?
I find this very interesting. In particular, I've had a number of people talk to me about how awesome Macs are, in particular discussing the adoption rate of OSX, etc. One of the things that continually gets pointed to is Apple's growth as evidence of this. While I don't pretend to have a strong grasp on the various numbers bandied about, if such a large percentage of Apple's revenue is solely from the iPhone, it really puts a damper on the idea that "based on Apple's growth, everyone will be using a Mac in just a few months" (hyperbole mine). Don't get me wrong, OSX market share may be increasing (possibly by large numbers), but my anecdotal examination of the world around me didn't seem to jive with what everyone was claiming.
Take it to the limit, everybody to the limit, come on, everybody fhqwhgads.
Incredibly 80% of their profits come just from apps for middle managers, hairdressers and telephone sanitizers.
Some drink at the fountain of knowledge. Others just gargle.
Apple takes over 50% of the profits from the entire mobile handset market. If you think of handset profits as 2 pies, Apple takes a whole pie, plus a piece of the second one, and then what is left of the second pie is split between everyone else, with most of it going to Nokia and RIM. All the Android handsets together are less than 5%. Profits are oxygen, so they determine a lot about who will be able to innovate further going forward, who will still be making phones in 2 years (hint: not Motorola) and so on.
Another interesting thing is it's the same in music players, tablets, and PC's. Apple takes the majority of the profits in those markets as well.
personal communication devices like his ``Knowledge Navigator'' (which eventually became the Newton MessagePad) --- looks like he was right.
William
Sphinx of black quartz, judge my vow.
And people wonder why the stock price jitters w/ the phones feature set.
makes sense...
my iPhone is my most important gadget.
I bet most people feel similar.
My list goes something like this.
iPhone
Laptop
Camera
XBOX
iPad
of Dropped Calls!
Flappinbooger isn't my real name
My informal statistical sampling of sitting on a bench in a mall near Atlanta, GA, told me that at least 75% of the people that walked by me talking on/texting on a phone had an iPhone. Admittedly, that area is rather affluent, but we are talking about a ton of people I took notice of. I often make a game of doing this while people watching; not necessarily cellphones, but other traits. I just happened to notice that a lot of people, even though they were with a group, were all paying attention to their phones and not each other. Depressing actually. Anyway, once I started tracking the phones I saw, the vast majority were iPhones. I was probably there close to an hour, and took a lot of samples.
My thinking at the time, was that if you just spent time at this mall, you'd think Apple had completely killed the cellphone market. I know that's not the case reading elsewhere, but purely on appearance, it seemed that way. Now I know that it simply could be that the people more likely to always be on their phones might like the iPhone more. Younger crowd maybe. I wasn't really paying attention to age. Blackberry users had to work on the weekend, etc. All kinds of ways the stats could be skewed.
WWJD -- What Would Jimi Do?
(Smash amp, burn guitar, take home the groupies)
Apple is a public company. RTFM
For Q2 2011, Apple paid $1.9 billion in taxes on $7.9 billion on profit
So...an evil American corporation (a triple redundancy) is making profit hand over fist. Hurray! Now how much did Apple pay to the US Government for the privilege of headquartering in America? $24,600,000,000 results in $8,610,000,000 in tax revenue for the federal government alone, not even counting state taxes, plus federal and state income taxes on Apple employees (which Steve Jobs evades by taking $1.00 in salary), plus any local taxes which Apple is liable for. How much did Apple actually pay? How much of their fair share did they evade by accounting tricks? A famous Nobel Peace Prize winner has said, "I do think at a certain point you've made enough money, but you know part of the American way is that you can just keep on making it if you're providing a good product or you're providing a good service." How much is enough for Apple, and when will they start writing checks to the US Treasury? Afflict the comfortable and comfort the afflicted!
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
Not a shock.... they supposedly made almost as much on the iPad last year as the Macintosh PC. And the iPad wasn't even around the whole year.
The Mac has experienced a bit of the "iPhone coattails" boost in the USA recently, but not world-wide. It's been stuck at about 5% of the global PC market for years, and even after this boost, it's still usually listed as less than 6%. But the iOS devices have been growing like crazy.
And it's a very smart market to have that kind of chunk in. Apple's getting revenue from every software and hardware product sold for all iOS devices. The iPhone, being a "Phone", is tossed out and replaced every year or two... people sometimes hang on their PCs for a decade.
Apple may not be top dog on unit sales, but they're winning on profits... just what they did on PCs. That will continue to keep them in a unique position in the business.
-Dave Haynie
It only goes to show Ballmer has no vision. He's all bluster. You say: "He was right based on the state of things at that time." which is why MicroSoft is always behind the 8 ball. A successful company wants a CEO who can envision the future correctly, not one who predicts the future and fails every time. Apple predicted the future correctly (and is repeating its self with the iPad) based upon "...what was known at the time" of the prediction.
True, I misread the numbers. Apple "only" made 6 billion after taxes in Q2. I wonder where that profit went? From their call:
"Turning to cash. Our cash for short-term and long-term marketable securities totaled $65.8 billion at the end of the March quarter compared to $59.7 billion at the end of the December quarter, a sequential increase of $6.1 billion."
http://seekingalpha.com/article/264616-apple-management-discusses-q2-2011-results-earnings-call-transcript
In other words, the profits went into the bank.
The summary wasn't clear on this, just what percentage of revenue came from the iPhone?
Nah, it's a comic crossing Teenage Mutant Ninja Turtles and the Hitchhiker's Guide to the Galaxy.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
I disagree. It's not a matter of how locked in people are to their itunes account and apps, it is whether the majority of the people *care*. I don't know many techies. All the people I know that have iPhones like them precisely because everything works together - iPhone, iTunes, the Apple "app" store. When I talk to them they like the way everything "just works" and how they all fit together. Phrases like "lock in" aren't in their vocabulary.
When I read 50% in the title, I wasn't sure if they meant 5%, 20% or 50%. I'm glad they clarified right away in the second line.
They're making all the profit.
The risk to Apple from Android is that smartphones (and other devices) get commoditized thereby sucking significant profits out of their devices. Apple is a company build on selling differentiated hardware at higher prices - they cannot compete on low prices and when they tried in the past it nearly put them out of business. Android is a defensive play for Google since much internet use (and thus ad dollars) is moving to mobile devices and away from PCs. Android and iOs don't bring in money directly for either company - both exist to keep their main revenue streams viable (mostly hardware for Apple and mostly advertising for Google) and both are essentially given away. The big difference is that Google can (theoretically) make just as much money from a low priced smartphone as a high priced one whereas Apple cannot. Apple will likely have to move downmarket at some point to protect their high end sales in much the same way they did with their iPods. I doubt they can forever compete only at the high end of the market.
The bigger risk to Apple is simply that they drop the ball majorly with some future iPhone release. It's not a diverse revenue stream and if they can't keep the iPhone ahead of the pack and in demand, they could be in serious trouble very quickly. It's something of a high wire act - high risk and high reward.
AT&T did not buy bellsouth.
ATT did buy them.
It's one of the few things they sell that's actually worth the price. Heck, even the mouse pads are overly expensive.
Well it was a merger but AT&T was considered the "buyer".
And they will need every penny to continue to hire lawyers specializing in patent trolling to maintain an artificial market share.
Why do you think they've sued HTC and Samsung? Apple is getting worried. They've managed some astonishing growth in the last decade, and it has almost entirely been as a consumer electronics company. Used to be the iPod but that has leveled off (though it is still big business) and now it is smartphones/tablets, "computer toys" if you like.
Well Android is a major threat to that. In particular it is a threat when paired with something like HTC Sense which looks real nice and is real slick to use. HTC is making phones that are slick and friendly, and they are moving the technology forward faster than Apple. You can get HTC phones with 4G (or 3GPP LTE if you want to be fussy), bigger screens and so on.
That is of course not to mention the cheaper market, but even in the premium market that Apple competes in, these companies have been fighting back in a big way and being effective. It threatens their market, so they are suing.
They are ok with other smartphones when they are clearly inferior and sell in small numbers, but when they are as good or better it is a major threat to them.
You have a point about the keyboard, but the iPhone is "globally ready" - I've used it many times when traveling internationally.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
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as in...
so?
Apple's computer sells have been outpacing the market for years since it went to "commodity" PC hardware.
Apple is fifth in market share (around 10%) behind 4 other companies in terms of units sold. Their market share has doubled in the last five years but it's relatively easy to grow from 5% compared with HP's nearly 30% or Dell's 20+%. They've grown but they've only taken a fraction of the market share and almost all at the high end of the consumer market. Apple does not seriously compete in corporate PC sales nor do they compete at the lowest end of the consumer market.
Demonstrably incorrect. There are tablets out there for equal or less money from (potentially) serious competitors like Research In Motion and Motorola. Somewhat misleading though since tablets are essentially a new market so there has been little time for competitors to bring competing products to market, regardless of price.
Apple can compete on price because it has $60 billion in the bank to buy up components raising the price for everyone else.
Having a lot of money in the bank does not mean they can (or should) compete on price. Competing on price means low margins and high volumes with undifferentiated products - exactly the opposite of what Apple sells. Apple does not try to maximize volume and their margins are among the highest in the industry. Their costs are quite high - developing all that software and their fancy designs is not cheap and you can see the cost in their financial statements. They tried to compete on cost in the 1990s and it nearly bankrupted them.
BTW your logic is not right. They have $60 billion in the bank because they DIDN"T buy inventory with it - that money is retained profit. Yes they could buy more inventory but they would be less profitable and drive up the price on themselves as well. No point in purchasing inventory you can't sell.
At one point Apple was buying 75% of the worlds capacity of flash memory. Apple still buys 25% of the world's supply.
Flash memory is not generally purchased in large quantities on a spot market. You can't just run to Toshiba and say I'd like 3 million flash memory chips delivered tomorrow. They have to purchase in advance and only then do the manufacturers produce the products. Buying market moving percentages of anything does not always result in lower prices if other people want that commodity too. If you buy 75% of the world's supply of anything, by definition you paid more than others were willing meaning you moved the price up, not down. There are numerous suppliers of flash memory and they adjust supply as demand shifts. Apple is a big player in this market but hardly the only one.
Apple can make money off of low priced iOS devices by selling its own software
The vast majority of the profit Apple makes is from selling hardware. Yes they make some money on the side from software and music sales and the rest it's a fraction of their overall revenue. Any profit Apple makes from software sales is simply gravy. Itunes exists to keep people buying iPods and iPads and iPhones. It is widely known that Apple does not make huge amounts of money from music sales. They do pretty well with App Store sales but those still are a fraction of their hardware sales. Don't take my word for it, look at Apple's financial statements.
Google makes their money selling advertising. Anything else they do is simply to keep the ad engine rolling.
What can an Android OEM make money from besides the phone?
Doesn't matter if they are willing to take a lower profit. There are plenty of companies who compete with Apple who are willing to take lower profits. Apple has big fat margins so there is a lot of room to compete on price. Furthermore since Google is bankrolling the software development for them (Apple has to eat those software development costs themselves) the Android OEMs have a theoretically lower price floor than Apple. Conceivably they could sell the Android device for less than Apple's cost and still be profitable.