Breaking Down Apple’s Financial Success (infographic)

Apple is a powerhouse when it comes to the consumer electronics market. Led by Steve Jobs’ enduring philosophies, Apple became the first publicly traded company in the United States to reach the $1 trillion valuation mark in 2018. Apple’s popularity is apparent in every mall, airport, and public gathering place you go, where you will see people typing away on iPads or Mac Books, checking the time on their Apple watches, and talking on iPhones. But even with all that success, how did Apple reach $1 trillion?

Apple is now worth more than 1% of the world’s GDP, but they have company at the top. Currently Apple is worth $1.41 trillion, but Microsoft is close behind at $1.39 trillion. Alphabet, the company which owns Google, and Amazon are trailing behind at $997.2 billion and $1.03 trillion, respectively.

When it comes to device sales, Apple dominates the American market. 41% of smartphones are Apple iPhones, while the next closest manufacturer with half the volume is Samsung with 21% of the market. When it comes to tablets, Apple’s iPads account for 38% of the volume sold in the United States. Even Amazon’s popular Kindle tablets only account for 7%. Apple clearly dominated the smartwatch market with 46% of volume, while Samsung and Fitbit account for 16% and 10%, respectively.

Apple’s earnings paint the picture for its continued success. In iPhone sales, Apple rakes in $167 billion annually, which is 63% of its revenue. In computer sales - Macs and Macbooks - Apple rakes in $25 billion in annual sales. For iPads, annual revenue is $19 billion, and for services the annual revenue is $37 billion. In total, Apple’s yearly revenue is $266 billion, and when its yearly operating expenses of $164 billion are subtracted that leaves $102 billion in gross profits yearly. It’s no wonder this tech giant reached $1 trillion in value.

The services Apple sells are one of the reasons the company is so profitable. If the company only sold devices they would lose a significant chunk of their revenue stream, and that would likely worsen over time. Services like Apple Music, Apple Pay, iCloud, Apple News +, Apple Arcade, Apple TV +, and Apple Care + keep people locked in the Apple ecosystem for a prolonged period of time. If all your music comes through Apple Music, switching to a different provider would be costly and time consuming. If all your files are on the iCloud, switching to a different provider would be cumbersome. At least part of Apple’s success comes from keeping users in the Apple ecosystem, which incentivizes them to continue to buy Apple products for a seamless transition.

Apple’s unit sales have skyrocketed over the last decade or so. In 2002, 3 million Mac computers were sold. By 2018 that figure had reached 18 million units. In 2007 the iPhone sold 1 million units, and by 2018 that figure had reached 218 million. In 2010, 7 million iPads were sold, and by 2018 44 million were sold. The quality and design of Apple’s products combined with the ecosystem of services keeps people coming back for more while also continually bringing in new customers.

When you own one Apple product, you tend to own all Apple products from your computer to your watch. The value of Apple products is apparent in their resale value, which other products don’t tend to have much of at all. This adds yet another layer of value to Apple products in the eyes of consumers. Learn more about how Apple has sustained its popularity over the decades as well as how Apple makes its money from the infographic below.

The Secrets To Apple's $1 Trillion Success [Infographic]
How Apple Makes Its Money
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