“For all the attention Apple has received this year for its new smartwatch and music service, or rumors about an updated TV device and building a car, the company is increasingly dependent on the iPhone,” Adam Satariano and Alex Tribou report for Bloomberg.
“Since the handset was introduced in 2007, the company has never collected as large a percentage of its revenue from one product as it’s doing now [almost two-thirds of the company’s revenue] — even as new products and services are introduced,” Satariano and Tribou report. “The device’s position at the center of Apple’s orbit will be on display Sept. 9 when Chief Executive Officer Tim Cook introduces new models at the Bill Graham Civic Auditorium in San Francisco.”
“The revenue dominance raises the stakes for Cook to keep the company’s marquee handset a top seller. Apple’s stock has slid in recent months in part on concerns about future growth, particularly about iPhone demand in China,” Satariano and Tribou report. “It’s a dilemma any CEO would love to have: The iPhone generated $102 billion in sales in Apple’s last fiscal year, more than Google, Facebook, and Twitter’s annual revenue combined.”
Read more in the full article here.
MacDailyNews Take: No, because iPhone has a very long, very bright future. iPhone is a device that is frequently updated and is capable of driving sales of other devices including Apple Watch, iPad, Mac, Apple TV and services including Apple Music, iCloud storage, iTunes Store content sales and rentals, App Store sales, iAd and much more.
Dominance is not a bad thing, when you are selling the “premier product.”
When you are selling “second rate,” well then, you gotta worry your stock will drop like Samsung’s plunge.
Agreed. The iPhone is a dominant and highly prized product. As a result, it generates lots of revenue – a strong majority of Apple’s annual revenue. It would certainly be nice to have a bit more diversity in Apple’s revenue stream, but only if that is achieved through greater growth in other areas. And that is a challenge, because Apple sells a couple of hundred million iPhones each year at a healthy ASP.
It is almost as if analysts would prefer that Apple made less revenue overall if the iPhone were a smaller fraction of that revenue. As long as Apple can maintain preeminence in its dominant product line, why worry? Any company in the world would be delighted to have that “problem.”
While MDN’s take may be theoretically true for Apple, perception is reality when it comes to AAPL. And the perception is that the iPhone is DOOMED.
It isn’t that the iPhone is doomed, rather that Apple is a one trick pony. When you are dependent on one product to make it or break it everyone can see that. Apple does need to diversify. But selling the best smart phone in the world and with very high margins is great. For now. Investors want to see something more broad and diversified for the future of a company that they invest in. that’s just smart investing. Don’t blame the investor.
Yes, because the other ponies in Apple’s stable (Mac, iPad, music retail, Apple Watch, etc.) don’t count. Apple is more “diversified” than Google (ad revenue), Amazon (retailing), or Microsoft (Windows).
I would like to see other Apple products gain greater share of Apple’s profits without a decline in sales of iPhone. Who says this is neither desirable or feasible?
Is there a special class at journalism school called, “How to make up empty, vacuous drivel”?
Yea, it’s taught at all the Ivy League schools. Same place newscasters get their indoctrination.
Sounds like someone has a case of “education envy”. You stick it to those “elitists” huh??!? Edjumucation don’t mean nutin’.
LOL. Oh son, please, please, please keep your NE Yankee elitism going. It works so well for you. We all know that education can only be taught by the high priests of Ivy league schools (or if you must, Oxford). You know that those hicks and stupids elsewhere cannot, simply cannot, do what you can do.
Of course what you believe has no basis in reality, but please keep your class-based thinking going. It is precious to behold as those not encumbered with your prejudice go on to innovate and succeed without buying into your juvenile construction.
It’s usually referred to as 101.
So Apple was too dependent on a single product line from1978 through 1986 where the vast majority of its revenues came from the Apple ][ series of computers?
So Apple was too dependent on a single product line from 1997 (when Steve killed off almost everything but the Mac) to 2003 (when the iPod started taking off)?
Suggesting Apple is too dependent on a single product line is just asinine. Yes, Apple is very dependent on a product until the next product line takes off — as has happened several times over the years. While Apple does have a very large fraction of its revenues coming from a single product line, Apples offerings is the most diverse it has had since the mid 1990s. And we all know how that “diversity of products” ended up!
The iPhone is the Macintosh of the 21st century! The people of tomorrow will celebrate the birth of the iPhone as one of the great advancements of human kind.
Wow, did someone put some ecstasy in your punch? The iPhone is great, they say Jesus would have used one; but it’s hardly something comparable to sequencing the human genome or landing on the moon or even penicillin.
This is fanboism at record levels.
I wonder if this guy’s hands are red and chaffed from all the apparent wringing that must have gone on when he wrote that article?
ExxonMobil is far too financially dependent upon oil for revenue. That company is doomed.
How financially dependent upon its search engine business is Google? However, that company is never called a one-trick pony like Apple is.
Yeah, but so what?
10 years ago they were financially dependent on the iPod.
Now it’s the iPhone.
In 10 years, who’s to say? Analysts are basically morons living in a world of neither here nor theres, just wheres. Guesses, if you will. And only the morons that haven’t a clue listen to what they have to say… and bring the “value” of company down… even though Apple continues to make more and more money.
I found it really ironic that Hulu sent out an email today announcing a new “Pro Plan” that’s 100% commercial free. Its only $4 more than their regular subscription. I really couldn’t help think its a reactionary move due to the upcoming AppleTV coming out…
“Too financially dependent on…” whatever is selling best among Apple’s gear. Entirely inevitable. So a big *yawn* to this repeating meme. 😴💤
Apple isn’t increasingly dependent on the iPhone, the iPhone just keeps performing for Apple. That’s not a bad thing, especially for a product with as short of a shelf life as the iPhone.
It wears out because we just keep using the portable thing every day, for everything. Something many in the Android crowd may not understand.