How Apple Makes Its Money

How Apple Makes Its Money

In 2018, Apple became the first publicly traded U.S. company to reach a market value of $1 trillion

The Biggest Apple in the Money Tree

• Apple is worth more than
  • 1% of the world’s GDP
  • The GDP of 183 countries*, including:
    • Turkey: $851 billion
    • The Netherlands: $826 billion
    • Saudi Arabia: $683 billion
  • 6 Stock Exchanges*, including::
    • BME Spanish Exchanges: $852 billion
    • Singapore Exchange: $728 billion
    • Saudi Stock Exchange: $530 billion
  • Net worth of 3 of the world’s richest individuals*, including:
    • Jeff Bezos: $148 billion
    • Bill Gates: $94 billion
    • Warren Buffet: $84 billion
• Apple vs. Other Tech
  

  Competition in the billion-dollar club is stiff, with four of the world’s top tech companies flirting with a trillion-dollar market cap

  • Highest Valued Global Tech Companies*as of 02/05/2020 - Market Cap
    • Apple: $1.41 trillion
    • Microsoft: $1.39 trillion
    • Alphabet: $997.2 billion
    • Amazon: $1.03 trillion
  • Apple Dominates The U.S. Tech Market
    

    Smartphones	Tablets	Smartwatches*
    Apple: 41% Samsung: 21% LG: 13% Lenovo: 7%	Apple: 38% Samsung: 15% Huawei: 10% Amazon: 7%	Apple: 46% Samsung: 16% FitBit: 10% Others: 28%

Follow The Money

Apple continues to lead the way with its innovative products and services — the financials are clear evidence

• The Big Picture*
  • Quarterly Profits & Expenses:
    • Gross profits: $20 billion
    • Operating expenses: -$8.6 billion
    • Saudi Arabia: $683 billion
  • Quarterly Sales & Revenue:
    • iPhone: $26 billion (48%)
    • Mac: $6 billion (11%)
    • Wearables, home, and accessories: $6 billion ( 10%)
    • iPad: $5 billion (9%)
    • Services: $11 billion (21%)
      

      Services include: Apple Music, Apple Pay, iCloud, Apple News+, Apple Arcade, Apple TV+, and Apple Care+

  • Stellar Annual Growth
    

    Apple has seen impressive growth across all of its products and services since initial launch

    • 2002: iMac (redesign) released
      ■ 3 million sold*
    • 2007: iPhone released
      ■ 1 million sold
    • 2010: iPad released
      ■ 7 million sold
    • 2015: Apple Watch released
      ■ 12 million sold
    • 2018: Unit Sales
      ■ Mac: 18 million
      ■ iPhone: 218 million
      ■ iPad: 44 million
      ■ Apple Watch: 23 million
    • Apple Services Revenue
      ■ 2013: $4 billion
      ■ 2015: $6 billion
      ■ 2017: $8 billion

Secrets To Apple’s Success

How did Apple rise to cult status?

• Philosophy Of Steve Jobs*
  • Design: "The aesthetic, the quality, has to be carried all the way through."
  • Quality: "Quality is more important than quantity. One home run is much better than two doubles."
  • Marketing: "Think Different"
  • Leadership: "The people who are crazy enough to think they can change the world are the ones who do."
  • Innovation: "Innovation distinguishes between a leader and a follower."
• Tech With Persistent Value
  • Mac Vs. PC
    

    Macs have many benefits PCs don’t offer

    • Updates and improvements are released more quickly
    • High-end design and feel
    • Seamless integration between all Apple products
    • Longer life with fewer support requirements
  • Macs Are Built To Last
    • Most PCs need to be replaced every 4 years,
      BUT a Mac can last 2x as long
    • A mobile phone can lose more than half its value in just one month
      BUT iPhones hold their value 1.5X better than competitors
  • Flourishing Refurbished Market

    Refurbished phone sales grew more than 4X faster than new phone sales in 2017

    • While Apple products can be expensive, their resale value helps offset the cost
      • A 2 year old iPhone sells for 62% of its original price
      • Buying a refurbished device costs 15-40% times less than buying new
      • • And, most consumers are happy with refurbished purchases
        • New computers are 2X as likely to be returned as refurbished Macs
        • 26 states also mandated refurb computers for public schools & gov’t offices

Why Apple Continues to Dominate

No other tech company has been able to rule the market like Apple — for three important reasons

• #1: The Ecosystem
  • Allows for easy integration among products
  • Increases the visibility of other Apple products
• #2: The Retail Presence
  • Allows customers to easily learn about new products
  • Provides technical support and repairs damaged tech
• #3: Brand Loyalty
  • Inspires trust and repeat purchases
  • Grows the value of a single customer over a lifetime
• #4: Commitment To Refurbish & Recycle
  • Ensures devices remain in use for as long as possible through upgrades like
    • Improved battery life
    • Easier screen replacements
  • Network of 5,000 Authorized Service Providers
    • Accept older devices for recycling
    • Buy & sell refurbished devices