Apple’s most profitable business segments

Apple and its business empire

Apple is one of the most famous companies not only in the U.S. but around the world as well. Its history dates back to 1976, when Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computer Company. It became the first U.S. corporation to surpass $1 trillion in market capitalization in 2018. Solid sales of its smartphones historically drove Apple’s spectacular growth in sales, profits, and share price.

But as sales of iPhones and other technology hardware devices slowed down, the tech giant made aggressive efforts to transform itself into one of the world’s leading digital services providers. 

Let’s have a look at Apple’s most popular and successful business segments. Even though the company’s fiscal year 2019 was characterized by a series of ups and downs, it successfully boosted its revenue from its services division. However, earnings from its most popular products, such as iPhones and MacBook laptops, declined somewhat below 2018 levels. 

For the first fiscal quarter of 2020, it forecasts revenue between $85.5 billion and $89.5 billion. The tech giant announced revenue of $91.8 billion and a profit of $22.2 billion. 

In the 2019 fiscal year, the company posted sales of $260.2 billion on a net income of $55.2 billion. 

Apple’s products and services 

It is no secret that Apple’s core product is the iPhone. Millions of people love it. Besides, demand remained strong after the company released iPhone 13. 

Sales of the iPhone 13 reportedly surpassed those for the iPhone 12, which still “skyrocketed” as of December 2021. The Cupertino-based company reported net sales for the iPhone unit of $192 billion for the 2021 fiscal year compared to $137.8 reported the year before. Sales jumped to $38.9 billion during the fourth quarter – up 47% from the same quarter of 2020.

Apple blamed the problems created by the Covid-19 pandemic for lower than expected iPhone sales. 

Apple’s Services business is led by the App Store as well as Apple Music. It also makes money thanks to AppleCare, Apple Pay, etc. The company’s services segment posted revenue of $68.4 billion during the 2021 fiscal year and $18.3 billion for the fourth quarter. This is compared to $53.8 billion for 2020 and $14.5 billion during the fourth quarter of 2020. 

Mac and iPad 

When it comes to Apple’s products, we have to mention Macs and iPads as well. Its personal computer business is built around the Mac and includes its MacBook laptops and the iconic iMac desktop computers.

The company’s personal computer business generated sales of $35.1 billion ($9.2 billion for the fourth quarter of 2021), which is an increase from the $28.6 billion reported in 2020. 

However, Mac’s importance declined as the personal computer industry experiences slowing demand worldwide. It is worth noting that the company’s computer business is very important for the tech giant from a strategic perspective. Do not forget that Mac is part of a broad, interlinked product family running on the iOS operating system.

The tech giant launched its new product called the iPad more than a decade ago in 2010. It gained popularity in no time at all. The iPad became the first commercially successful tablet to hit the market.

Even though worldwide demand for tablets is declining, the company continues to dominate this part of the market. This unit drew in sales of $31.9 billion during the 2021 fiscal year and $8.3 billion during the fourth quarter of the year. 

Apple also makes money thanks to other products. The company’s Wearables, Home, and Accessories segments are made up of devices such as AirPods, etc. Interestingly, the segment posted $38.4 billion in revenue in 2021 and $8.8 billion for the year’s fourth quarter. 

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