Apple Inc. (AAPL) found in 1976, then became the first US company to exceed $ 1 trillion in market capitalization in 2018. Apple’s spectacular growth in sales, profits, and share price has historically been the result of five solid Apple businesses.
Apple’s Five Most Profitable Business Lines
Apple’s core product, the iPhone, has been in the top five smartphone vendors in the world since 2009. For the first fiscal quarter of 2020 which ended on December 28, 2019, iPhone sales totaled $ 55.96 billion.
Overall, Apple’s reported earnings and earnings for the quarter were significantly higher than Wall Street analysts had expected; this is partly due to the popularity of the new iPhone models. The first quarter of the fiscal year is a very important period for Apple because it covers the holiday season and the three most favorable months of the year – October, November, and December.
Apple’s service segment posted revenue of $ 46.3 billion in fiscal 2019 and $ 12.72 billion for the first quarter of fiscal 2020. In fiscal 2019, Apple’s services business posted gross margins of 63.7%, close to double fold the gross margin of 32.2%. from the company’s product sector.
Recently, there have been several additions to Apple’s service business, including streaming movie and TV services, subscriptions a new video game, and Apple Card, which will compete with other financial payment giants.
Apple’s personal computer (Mac) business generated sales of $ 25.7 billion in fiscal 2019. Mac’s contribution to Apple’s growth has consistently fallen as the personal computer industry is experiencing slowing demand around the world. For the fourth quarter of fiscal 2019, Mac products accounted for only about 11% of the company’s revenue.
However, from a strategic perspective, Apple’s personal computer business is very important to the company because it is part of a broad and interconnected product family that runs on the iOS operating system.
When Apple launched the iPad in 2010, it quickly became the first commercially successful tablet computer to enter the market. In the first three months after its release, the device sold more than three million units. In the fourth quarter of 2019, iPad controlled 36.5% of the global tablet market share. In fiscal 2019, iPad sales totaled $ 21.3 billion.
Wearables, Home, and Accessories
This business consists of devices such as AirPods, Apple Watch, and HomePods. This segment posted sales of $ 24.5 billion in fiscal 2019. Apple has increased product launches in this category. The second generation of AirPods, the company’s popular wireless headphones, launched in the first half of 2019 and the noise-canceling AirPod Pro wireless headphones launched in October 2019.