Apple Inc. (AAPL), founded in 1976, became the first U.S. corporation to surpass $1 trillion in market capitalization in 2018. Apple’s spectacular growth in sales, profits, and its share price have historically been driven by solid sales of its iPhone products. However, as sales of their iPhone and other technology hardware devices have slowed down, the company has made aggressive efforts to transform itself into one of the world’s leading providers of digital services. Apple’s fiscal year 2019 was characterized by a series of ups and downs, but overall, they were successful in boosting their revenue from services, while their earnings from their most popular products, such as iPhones and MacBook laptops, fell somewhat below 2018 levels.
For the first fiscal quarter of 2020, Apple had forecast revenue between $85.5 billion and $89.5 billion. The company announced revenue of $91.8 billion and profit of $22.2 billion, an all-time record for both net income
Apple’s New Profile
Table of Contents
Apple’s services business is led by the App Store and Apple Music. In May 2019, Piper Jaffray analyst Michael Olson claimed that Apple had evolved its service business so much that it was worth $502 billion, using an analysis that assesses the value of each business unit and then combines them together for an overall valuation estimate. At the same time, Olson estimated that Apple’s hardware business was only worth $398.8 billion. This would make Apple’s services business worth more than its hardware business.
In fiscal year 2019, Apple posted sales of $260.17 billion on a net income of $55.25 billion. In the first quarter of 2019, earnings came in at $4.18 on a per share basis; at that time, this was a record high for the company. But in the first fiscal quarter of 2020, earnings per share were up to $4.99.
For fiscal year 2019, the company’s iPhone business accounted for approximately 54.7% of total sales. Apple’s growing services segment made up approximately 17.7% of revenue, ahead of the Mac, which generated 9.8% of total revenue. The wearables, home and accessories segment comprised 9.4% of sales and the iPad accounted for
Here is a more detailed look at Apple’s five most profitable business lines.
Apple’s core product, the iPhone, has ranked amongst the top five smartphone vendors in the world since 2009. For the first fiscal quarter of 2020 ending on December 28, 2019, iPhone sales were $55.96 billion. Overall, Apple’s reported profit and revenue for the quarter were significantly higher than Wall Street analysts had predicted; this was partially 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 lucrative months of the year–October, November, and December.
In previous quarters, any decline in iPhone sales have been attributed to a slowdown in China, a longer iPhone replacement cycle, and heightened competition in the global smartphone market. Apple’s iPhone 11 has become Apple’s best-selling smartphone since it launched.
Regarding Apple’s Q1 2020 holiday performance, CEO Tim Cook said, “We are thrilled to report Apple’s highest quarterly revenue ever, fueled by strong demand for our iPhone 11 and iPhone 11 Pro models, and all-time records for Services and Wearables.”
Apple’s Services segment posted revenue of $46.3 billion in the fiscal year 2019 and $12.72 billion for the first quarter of the fiscal year 2020. In the fiscal year 2019, Apple’s services business posted gross margins of 63.7%, approaching double the 32.2% gross margin of the company’s product sector. As a whole, Apple’s subscription business (including subscription apps) grew 40% year-over-year. This revenue comes from selling a range of services, such as iCloud storage services, Apple Music subscriptions, and AppleCare warranties. According to Apple, there are over 450 million paid subscriptions on Apple’s platform.
In 2010, Apple’s services business revenue generated only $5.2 billion in revenue. Over the next two years, it nearly doubled to $10.2 billion. Quarterly services revenue has skyrocketed since then, and Apple’s CEO Tim Cook has made it a goal to speed up that growth. Recently, there have been several additions to Apple’s services business, including a streaming movie and TV service, a new video game subscription, and the Apple Card, which will compete against other financial payment giants.
The performance of some of these new services, such as Apple Arcade and Apple TV+, are reflected for the first time in the financial results for Q1 2020.
Apple’s personal computer business, built around the Mac, generated sales of $25.7 billion in fiscal year 2019. Mac’s contribution to Apple’s growth has consistently fallen as the personal computer industry has experienced slowing demand worldwide. For the fourth quarter of the fiscal year 2019, Mac products only accounted for approximately 11% of the company’s revenue. However, from a strategic perspective, Apple’s personal computer business is very important for the company because it’s part of a broad, interlinked product family running on the iOS operating system.
When Apple launched its iPad in 2010, it quickly became the first commercially successful tablet computer to hit the market. In the first three months after it was released, the device sold more than three million units. As of the fourth quarter of 2019, the iPad held a 36.5 % share of the global tablet market. In the fiscal year 2019, iPad sales came in at $21.3 billion.
Wearables, Home, and Accessories
Apple’s Wearables, Home and Accessories segment is made up of devices such as AirPods, Apple Watch, and HomePods. The segment posted $24.5 billion in sales in the fiscal year 2019. Apple has been ramping up the release of products 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.
Compete Risk Free with $100,000 in Virtual Cash
Put your trading skills to the test with our FREE Stock Simulator. Compete with thousands of Investopedia traders and trade your way to the top! Submit trades in a virtual environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need.
Top business skills to learn from poker
Poker is incredibly popular across the globe, with (according to World Poker Tour) more than 100 million online poker players. There are many millions more that play in land-based casinos, and the same number again that play it informally with friends and family.
Poker has been popular for centuries, as it is easy to learn, yet difficult to master. There are different variations of the game, and it has expanded to include tournaments, casual games, and high rollers tables, providing something for everyone. 888 Poker provides a vast range of options for players of all abilities and budgets.
Playing poker requires a number of skills, many of which can be beneficial in other areas of life, in particular business and entrepreneurship. Players must be self-aware, mentally strong, and resilient, entrepreneurs must be able to analyze incomplete information, read others, and take on new information quickly.
- Ability to learn quickly
When learning the game, players need to take on a great deal of information very quickly. They need to do some basic research on the rules, the different winning hands, and the probability of getting these hands. They also need to practice, practice, practice before heading out into the real world, and will often practice the game with friends, all striving to improve their own game.
In business, it is important to be able to take on new information and adapt to new situations. As in poker, to be successful in business individuals need to be adaptable and knowledgeable.
- Decision making
As well as being able to take on new (and changing) information, poker players need to be able to make decisions. Be it raising, calling, or folding, knowing what the appropriate action to take and when to take it is key to success at the table. In business, it is not dissimilar: knowing when to move forward, when to challenge, when to invest, and when to quit, are very important skills for any entrepreneur.
- Extrapolating from incomplete data
In poker, players will know what cards they hold and the communal cards but won’t know what their opponents are holding. They will be able to make deductions based on the information in front of them, and the behaviour of their opponents. Players won’t be able to have 100% of the information to be able to make their decisions and have to hope that their powers of deduction will lead to success.
In the world of business, if individuals waited until they had all the information it would be too late to take actions. They will need to get as much information as possible from different sources and make a decision balancing the level or risk. Resume provides a guide on crucial decision making for career development.
- Money management
When playing poker players shouldn’t gamble more than they can afford to lose; they should stick within their limits and play wisely to build up their pot of winnings. In business, it is similar. Entrepreneurs should ensure that their money is managed and invested appropriately. The higher the pay out, the higher the risk, and whilst sometimes in business it pays off to be risky, there needs to be a balance to ensure the business will survive. Fiscal mismanagement is one of the biggest reasons that new businesses fail.
- Mental acuity
When playing poker, players have to not only look at their cards and the communal cards, but identify how their opponents are playing, checking to see if they have any tells. It is vital to analyze the chances of winning, considering a number of different variables. Entrepreneurs have to analyze market conditions, their competitors, and be able to collect and interpret data accordingly.
Alongside mental acuity is mental strength: in poker, players can have periods where they win every hand, or lose every and, and it is important to know when to stop and when to change approach. In business, entrepreneurs need to know how to manage the ups and downs that inevitably come with being in business.
The top poker players are driven by a love of the game, not money. By being passionate about poker they learn the ins and outs of the game, learn about the psychology behind it, learn the tricks of the trade and invest in bettering themselves every step of the way. Money is a secondary consideration; apart from some of the top players in the world, there are easier and more dependable ways to make money.
Entrepreneurs should always be aware of the financial potential of their endeavours, but the success of the business will depend on the passion and dedication of its people. Yopreneur explains how entrepreneurs should be passionate and focus on doing what they love. Entrepreneurs should start out wanting to create something and enjoy the journey.
- Learning to fail
Even the most talented and experience poker players can fail. They can make a silly mistake that costs them the game, be trumped by a better player, or simply run out of luck. All players will lose some of the time; winning more than losing is a definite perk, but by no means guaranteed, especially when a player is starting out.
Estimates indicate that over 85% of start-ups fail, and it is important for entrepreneurs to remain resilient, pick themselves back up, and get back on the horse. They can learn from their mistakes and do better the next time.
Content on this website is protected by DMCA. Dont waste your time copying because you would eventually remove it.