Home Forums FineTunedMac Community Lounge Wonder Where Apple's Revenue Comes From?

Apple's just announced figures show that out of $46 Billion in revenue the distribution by product line was…

• iPhone — 60%
• Services — 13%
• Mac net sales — 12%
• iPad — 9%
• Other — 5%

That is actually a three percent increase in revenue percentage for "Mac Net Sales" and comes on the heels of a recent announcement than, believe it or not, IBM is switching to Apple for their desktop computing. Not only have their employees have asked for the change but also the four year life cycle costs of Macs averages over $400 LESS than the PCs they are replacing. I can't wait until the next person tells me they use a PC because they are so much less expensive than a Mac. 😃

On the other hand the next time a Mac user complains about Apple's trend toward making MacOS and iOS more and more like one another, all I can say is, "Follow the revenue." iPad revenues are 75% of the entire Mac line up and I would bet a whole lot cheaper to engineer, design, and build.

And on still another hand, Apple's annual profits fall for first time in 15 years as iPhone sales decline.


Can you quantify that?


I assume that you meant "iOS device revenues", but how does making macOS and iOS alike fit into that picture?

I do not have IBM's breakout of costs but their life cycle figures include the initial cost of the device, setup, training, service calls, upgrades, repairs, etc. IBM said among other things supporting the Macs takes less than half the number of people, they have far fewer service calls, user's are usually able to solve their own problems, etc. In other words IBM is confirming that Macs just work.

I can see what I said could be misleading. iPad revenues account for 9% of Apple's total revenue while "Mac net sales" i.e. any revenue attributable to the sale of Mac computers, third party software and peripherals, etc. account for 12% of Apple's total revenue. The revenue from iPad sales accounts for 9% of Apple's total revenue. Therefore the revenue from iPad sales is 25% less than the revenue from Mac net sales. To put it another way, Mac net sales contribute 25% more to Apple's total revenue than iPad sales. Even another way of looking at that would be from the iOS standpoint. IOS devices account for 69% of Apple's total revenue and "Mac net sales" only account for 12%. (I will have to dig deeply into Apple's quarterly report to confirm this, but I suspect the term "Mac net sales" is used because it includes profit from third party Mac peripherals sold through the Apple Store, while revenues from the other areas either do not have that component or the component is small enough that it can be subsumed in the accounting records.)

As to There are no revenues from products that are given away free. That is why these numbers are termed REVENUE not PROFIT or GROSS PROFIT. MacOS (like it or not it is no longer OS X) and iOS are not revenue items they are COST items. While MacOS and iOS are an essential component of Mac computers, iPhones, and iPads they are no different from Mac, iPhone, and iPad hardware except Apple does not have to pay a third party to manufacture MacOS or iOS. Never forget that Apple is structured around hardware sales and is NOT a software vendor per. se. What I see as uniquely Apple is their move into creating a totally integrated computing system where MacOS and iOS devices are peripherals to the integrating media, iCloud. But that is an entirely different and ultimately far more complex subject.

Yes, Apple's total revenues are down, but computer manufacturers revenues are down across the board. The industry, including Microsoft, Lenovo, Dell, and most others are seeing lower revenues as well. I suspect a major factor in this decline is market saturation. There are no huge markets with unfilled demands for computers opening up, there are no new Gee Whiz hardware or software innovations creating new demand, there is no overwhelming reason for customers to go out and buy the "latest and fastest" new computers, sales are primarily replacements not new users.

Adobe, Microsoft, and others have recognized this market saturation by leasing rather than selling their software. Apple is now selling annual or biannual upgrade options for iPhones (which amounts to little more than an old fashioned lay a way plan and gives Apple the money one to two years in advance of the actual sale). I don't know what all is bundled in Apple's Services category, but I suspect iCloud space leasing is included in that category which is bringing in more revenue than "Mac net sales" and that is strictly a rental, not even a lease. All of this designed to provide a stable long term cash flow.

Thanks for the clarification.


That ignores the fact that Apple's revenue decline is apparently the result of a (n analyst anticipated) decrease in iPhone, rather than computer, sales.

Given iPhone is so dominant in Apple's revenue stream, even a small change there would have an outsized effect on total revenue. It could also account for the roughly 2% increase in the Mac net sales contribution even if Mac net sales revenue remained constant.

By-the-way U.S. smartphone sales are down pretty much across the board. Some smartphones sold primarily in China are doing well but they are still a relatively small player in the world market. At the same time, Apple is having problems keeping up with the market demand for the iPhone 7 Plus with its dual lens camera but hopes to catch up by the end of the next quarter.

From what I've read, it's not the result of actual demand exceeding anticipated demand, rather it's supply-side failure.

Not to prolong this discussion, but no matter what the cause there is unfilled demand and that means postponed if not lost revenue. Had the supply been able to meet the demand the iPhone's contribution to Apple's revenue would have been an even higher percentage and thus Mac net sales contribution would have been proportionately smaller.