Apple’s 3 Main Sources of Revenue

Apple’s 3 Main Sources of Revenue

PlusMarkets AnalysisJune 10, 2021

Apple Inc. was founded in 1976 and has since become the pioneer that crossed the $1 trillion market capitalization in the US. Apple stock has primarily been driven by sale of their key product – the iPhone. However, other products have also contributed to Apple’s impressive growth in sales, profits, and share price. Besides the iPhone, the company also had success with the debut of iPods, MacBook laptops, Apple Watches, and many others.   

With almost half a century of experience, the company has broken many barriers and shaped the markets. In the first quarter of 2021, Apple surpassed the symbolic $100 billion mark in a single quarter. But which of its ventures are Apple’s main sources of revenue? 

iPhones  

This is Apple’s core product that accounts for the majority of the company’s revenue. Based on data provided by Statista, iPhones made up 53.51% of the conglomerate’s profits for the first quarter of 2021. Generally speaking, iPhones have generated over 50% of Apple’s revenue for over a decade. In Q1 of 2021, iPhones accounted for $65.60 billion in revenue. 

iPhone has ranked among the five best smartphone vendors globally since 2009. The first Apple smartphone was released in 2007, colloquially known as the first-generation iPhone. The price tag was $499 for the 4GB model and $599 for the 8GB model.  

Since then, Apple Inc. has released many different iPhone models varying in size, capability, storage capacity, and many other factors. To date, Apple has released 12 series of iPhones, and most of the releases included multiple models summing up to 29 different iPhone models in total.  

Services 

Apple’s services include their subscription business such as apps, iCloud storage services, Apple Music, AppleCare warranties, Apple TV, and many more. In the first quarter of this year, Apple’s services sector accounted for 18.87% of its total revenue, totalling $15.76 billion in revenue. 

Reportedly, Apple’s services business was up 24% year-over-year. All-encompassing subscription services such as Apple Music, Apple TV+, licensing fees paid by Google for Apple gadgets to have Google as the default browser, among others, have all contributed to service being the revenue making machine that it is today. 

MacBook Laptops 

Although personal computers were the first-ever products that the company built, they take third place on the revenue-generating list today. Macbook’s contribution to Apple’s growth has been in continuous decline as the global demand for personal computers decreases. However, it is still a very profitable business, accounting for $8.68 billion in profit for the first quarter of the year.  

The lower numbers could also be attributed to the fact that there’s a much higher turnover of phones than laptops in the market. Nonetheless, the Macbook business is essential to the company as the personal computer is a crucial player in Apple’s interlinked product family running the iOS system. 

iPads 

From iPods to iPads, Apple undoubtedly has a knack for innovation and design. iPads made it into the pockets of 3 million users when they were first released in 2010. By 2021, they accounted for 8.71% of Apple’s revenue, amounting to $8.44 billion in the first quarter alone. Overall, all Apple products that could have been used for remote work or education enjoyed a few very successful quarters as many countries went into COVID-19 lockdowns.   

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Risk disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.