How Does Apple Make So Much Money?

$171 billion: How Did They Do It?

Apple made $171 billion in revenue last fiscal year. There are 7 billion people on Earth.So Apple made the equivalent of $24.50 per person.Here’s how they did it!

Did you pay Apple $24.50 last year?

No. 1: iPhones

• Apple’s biggest revenue driver and fastest growing product over the last two years was its iPhone.

• Over half – 53.4% -- of Apple’s revenue was from its iPhone lineup.

• Revenue from the iPhone was up 16% year over year and nearly 100% over two.

Revenue: $92.3 billion

Apple’s Superstar Product

• Apple’s iPhone has been growing as a percentage of revenue, going from 42% to 53% in three years.

• That’s good, because according to multiple third-party sources, Apple’s iPhone is its highest-margin product

Great growth and solid margins

No. 2: iPads

• Apple’s second-largest revenue driver was the iPad.

• But growth’s been slowing – it grew only 3% year over year versus 61% year-over-year growth in the previous fiscal year.

Revenue: $32 billion

Slowing Growth

• After a high-growth year, sales are slowing.

• Even still, the iPad provides roughly 20% of Apple’s top line.

Sluggish growth from Apple’s No. 2 product

No. 3: Macs

• Rounding out the top three is Apple’s Mac line.

• Revenue has been flat over the past two years; growth’s been hard to come by.

• However, this is impressive in a down PC market.

Revenue: $21.5 billion

No. 4: iTunes, Software, and Services

• With a CAGR of 31% over the last two years, this is Apple’s second-best performing segment.

• In addition to adding to Apple’s top line, this segment adds value by improving the user experience for other Apple products.

Revenue: $16.1 billion

No. 5: Accessories

• Apple’s accessories segment will get a boost from the recent Beats acquisition.

• Look for growth to pick up from its two-year average of 13% per year.

• It hasn’t kept up with Apple’s total revenue growth over that period, but it’s still better than…

Revenue: $5.7 billion

No. 6: iPod

• Once a high-flyer, iPod sales have cratered.

• On the heels of a 25% drop in fiscal 2012, the iPod dropped 21% this year.

• Many analysts have pointed to cannibalization from the higher-margin iPhone.

Revenue: $4.4 billion

Leaked: Apple’s Next Smart Device

(Warning, It May Shock You)