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The article pitch: "Apple makes a staggering, gargantuan, and ever-increasing amount of money from the iPhone. How can we make that sound like a bad thing?" It

The article pitch: "Apple makes a staggering, gargantuan, and ever-increasing amount of money from the iPhone. How can we make that sound like a bad thing?" It's a nice touch that both graphs show the iPhone's share of revenue and units sold, rather than totals, thus obscuring the incredible growth in both numbers.

venomsnake 11y ago
Being one trick pony is a worrying thing, even if the pony is shitting enough gold to make Sir Tywin Lannister jealous. Add the fact that the company has not had a new breaking star since Jobs died and that they are playing catch up with the other players on innovation - the chances of serious trouble in the future - while slim, are not nonexistent.
- silvestrov 11y ago
  > one trick pony ... a worrying thing Apple does more than the iPhone. They have a profitable computer business too. So it's only worrying thing for Apple if they start relying on that single product. If they keep (fixed) expenses down so they can live without the cash cow, then it's no problem. It's very often the high fixed expenses that get you. Same with people getting a new job where they earn less: the unsellable expensive house is a problem, eating out too often is not an unfixable problem.
  - blumkvist 11y ago
    >If they keep (fixed) expenses down so they can live without the cash cow, then it's no problem. That totally depends on how you define "problem". I believe the market will definitely have a problem with the current asking price of the owners for 1 share of the company if the iphone stops being a thing. This will make the owners very worried indeed.
    - HiYaBarbie 11y ago
      A stock market crash is coming either way. Why? Because nothing has been fixed since 2008, the official US unemployment rate is a sham, and so on.
      - dagw 11y ago
        A stock market crash is coming either way A stock market crash is always coming. If you can't say if it's coming next month, next year or next decade, then the statement contains no information.
        HiYaBarbie 11y ago
        > A stock market crash is always coming. And you complain about a statement containing no information? The thing is, no one knows exactly when a crash will happen. But some people know that one will happen say, within the next five years, and that it's going to be worse than 2008 and 2001 because the underlying problems have only been getting worse.
        venomsnake 11y ago
        The markets can stay irrational for longer that you can stay solvent.
        HiYaBarbie 11y ago
        That's certainly true, but not really relevant :)
        blumkvist 11y ago
        Oh great. More doomsday jibberish. Listen gais!!!! A market crash is comming! I read it on a blog. Brace yourselves! (You heard it here first)
        HiYaBarbie 11y ago
  - _nedR 11y ago
    Nobody is worried about Apple's survival. Barring doomsday scenarios, Apple looks set to be a very large, very profitable company for the foreseeable future. Just like Microsoft. They are worried about Apple's growth prospects. Once the Chinese markets are saturated, where next? And if Apple does not innovate, they could end up losing market-share to competitors when they inevitably catch up. Once that point is reached, Apple's only option is too undercut them on price (and with huge cash reserves and market clout, Apple is in a much better place to do this). But this means reduced margins, and shrinking profits (although they may stabilise to very respectable level). Apple has so far avoided this by staying ahead of the competition through innovation, entering new markets with sub-par competition like they did with the iPod, iPhone or creating entirely new ones like they did with iPad and iTunes. Before you say that Apple didn't invent the tablet, the digital music marketplace, or the mobile software marketplace - None of that matters - in real money terms, Apple as good as did. But what new markets are there for Apple to enter? People think the electric car market is a right fit for Apple. The article says that the global premium car market as a whole is currently only worth 220 billion dollars per annum ( don't know whether this includes the premium compact market as well ) which is not much when considering the fact that iPhone's sale for previous 12 months was 100 billion. And the automobile market is highly competitive with plenty of incumbents with over 100 years of experience. Perhaps Apple could transform the business model of the market to make it much bigger, But like with the smartwatch, Apple is possibly late to the game, with Tesla, Google, Uber, all working frantically to do the same (each with their own vision and approach). In my personal opinion, Apple still has plenty of room to enter and exploit the market. In conclusion, investors are worried whether Apple's party of year-over-year growth in revenue and profits which it has sustained over the last decade is finally over.
    - IBM 11y ago
      How does Nike deal with saturation once everyone who's going to buy one gets a pair of Nike running shoes?
      - dagw 11y ago
        Partially by expanding into clothing and sports gear and partially by turning themselves into a fashion company and convincing people that they have to own lots of different shoes in lots of different colors.
- tdkl 11y ago
  I wouldn't call them one tricky pony. iPod, iTunes Store, iPhone, iPad were all "one trick ponies" and yet they changed the tech.
- nnethercote 11y ago
  > the company has not had a new breaking star since Jobs died Steve Jobs died less than four years ago. The iPhone is a once-in-a-generation blockbuster product. I think your expectations are a little high.
  - TheOtherHobbes 11y ago
    Not so sure. Apple's recent launches have all been clumsy failures. Maps was a disaster, iCloud is no one's darling, Music looks like a dud, Watch isn't even a hobby, and the core line is trapped in a cycle of thinner/lighter/goldier make-overs. Opportunities have been missed. Just one example: Apple could have owned the DIY video content market, as they did with audio podcasts and apps, with all the synergies for hardware and software sales and training that would have created. Instead they've handed it to Google/YouTube. Apple is practically indestructible as a company at the moment, but I can't see the momentum continuing ten years from now without something new and amazing escaping from Cupertino - maybe like Amazon's Echo, but even better. Jobs succeeded because he could always be persuaded to leave a space for users to add content. Podcasts did that, so did apps - and both changed the industry. Cook seems more like a top-down kind of a guy, and less focussed on users. That's not a good thing at all, IMO.
    - minthd 11y ago
      In general i agree - on the innovation front, Apple isn't so strong.But like it did with maps - through the sheer power of investment ,together with owning the platform/user and a bit of time ,now maps dominate IOS mapping apps. Maybe they could achieve some growth by continuing doing that ? Also you mention opportunities being missed. Can you please expand ?
- madeofpalk 11y ago
  > Add the fact that the company has not had a new breaking star since Jobs died and that they are playing catch up with the other players on innovation To be fair, has anyone had a 'blockbuster breakthrough' in innovation in the past 5 years (since Jobs died)? I honestly think that innovations in consumer tech have more or less stalled as the lower hanging fruit was picked a while ago. What's left are more of the bigger issues, like energy and self driving cars.
  - marincounty 11y ago
    I don't think Jobs would be complete happy with computers that are becomming increasingly difficult to repair? I look at that new MBP, and wonder what's serviceable in it? Yes, I know most people don't care about the ease of repair of their computers, but all that adhesive? Call me old school, but I like screws, and a few modular replaceable components. (I don't know what replaceable on the new MBP. It looks like one big motherboard? I might be way off base?) I know Jobs had a great sense of aesthetics, but he seemed like he had a very rational side too? I could picture him thinking most people won't care about repairability on products under a thousand dollars? I don't think he would he would be o.k. with that same philosophy on a 5 grand computer? I think the last thing he would want for Apple products is any scuttlebutt along the lines, "There products are great, until they breakdown?" A major part of their success is the beauty(not just aesthetic) of their hardware? Sometimes, I really do think Jobs was Apple? Sorry, under his leadership, I don't recall many complaints/bugs not actively being solved? Yes, there were always Apple haters, but even the worst complainers had less to complain about--right up to his death? I recall, even when he was in home palliative care; he was still designing/thinking about Apple products? I know he was probally difficult to work for--maybe mean, but I really miss the man!
    - incepted 11y ago
      > he seemed like he had a very rational side too? Remember that he died because he thought a fruit diet could cure his cancer instead of real medicine.
    - madeofpalk 11y ago
- huxley 11y ago
  For most other companies the iPad, Mac, AppStore, iTunes or even iPod product lines would be considered significant or market leading products. Apple seems like a one-trick pony only in relation to the gargantuaness of the iPhone pony and the relative sparsity of ponies in the rest of the marketplace.
- IBM 11y ago
  That one trick pony is going to be minting cash for the next 20 years at least, just like the Mac has been for the past 40 years.
  - pjmlp 11y ago
    Except the Mac would have died if it wasn't for Jobs return. I remember those failed attempts to rejuvenate the Mac OS and not having any significant Macs sales on my country besides a single importer company on the capital.
    - huxley 11y ago
      Fair but the Apple of today is also a very different company than the Apple of 1996. Before the Jobs/Cook era, Apple used to have terrible inventory management, that isn't a problem any longer. Apple used to be extremely dependent on third-party distributors, they now are one of the most profitable retailers in the world, they also have built wide distribution networks far beyond "computer stores" Back then, Apple had burned through most of the company profits, Jobs and Cook built a tidy trust fund worth approximately $250 billion cash-on-hand Apple is in a far better position now to handle a debacle or stagnation, assuming one was to happen.
  - Eric_WVGG 11y ago
    Mac is 31 years old but yes, I do agree that innovations on the scale of GUI desktops and touchscreen pocketable computers take place once every several decades. Interesting that the same company was largely responsible for bringing both of those to market, though...
  - minthd 11y ago
    20 years is a long time. What if virtual reality becomes the preferred entertainment method ? What if something other than phones becomes the new status symbol ? What if android manages to create an android status symbol phone or a unique android experiences ? What if due to some apps iMessage loses some of it's power ? what if itunes loses some of it's power ?
- mdasen 11y ago
  Being a one-trick pony can definitely be worrying. But are other companies so different? 92% of Google's revenues come from ads against 63% of Apple's revenues coming from the iPhone. I think saying that Apple is playing catchup on innovation needs to be flushed out, but you're right that the possibility for serious trouble is slim, but not non-existent. However, is the possibility for serious trouble greater than, say, for Google? Google is facing European regulators unhappy about a single firm controlling 90% of the searches. The iPhone and OS X are going to have ad-blocking with iOS 9 and OS X 10.11. Think of all those iPhone users now blocking ads. The iPhone is 44% of the market in the US. All companies face threats to their future earnings. Walmart faces Amazon and potential wage increases. Apple faces consumers deciding they don't need a new iPhone. Google faces regulatory unhappiness about monopolising information access combined with loads of iPhone users turning on ad-blocking. Heck, Google faces the potential of Apple switching to Bing as the default for the iPhone and drawing a lot of traffic away from Google (and iPhone users tend to punch above their weight in terms of dollars spent and time on device compared to Android users). Microsoft faces everyone moving to mobile and Windows and Office becoming relics of the past. UPS and FedEx face the prospect of Amazon and others using automated delivery methods. The auto-industry could be facing self-driving cars from new entrants including Apple and Google while self-driving technology poses a threat to their very existence as an independent industry. Heck, with self-driving cars, it's simple for anyone with a bit of capital to create a viable Uber competitor in a way that is extremely difficult when recruiting human drivers - Uber could be disrupted before it even becomes profitable. The point being that companies face a bunch of threats to their long-term profitability because of a lack of diversification. It would be great to see Apple more diversified, but I think your suggestion of "slim, [but] not nonexistent" is the right attitude. It would be great if Apple were more diversified, but it would be great if a lot of companies had easy, public answers to how they would deal with a major disruption to their main revenue source. I'm sure Apple is thinking about this a lot.
y04nn 11y ago
The article points out that Apple's high revenue only depend on iPhones sales. And they didn't succeed to diversify.
- yoz-y 11y ago
  Their graphs would be more interesting if they were not scaled as a percentage. A company that would only make the iPad would still be insanely profitable, the same goes for a company that would only make Macs. Apple's problem is not the diversification, it is that the iPhone revenue is so huge that it eclipses anything they could put next to it.
- harywilke 11y ago
  The iPhone was a successful diversification.
esolyt 11y ago
How does this article make you so mad? The author does not discuss whether Apple makes enough money or not. Rather, it points out that "gargantuan" profit almost entirely comes from iPhone. > It's a nice touch that both graphs show the iPhone's share of revenue and units sold, rather than totals Yes, because it's the only kind of graph that's relevant in this case.
- nnethercote 11y ago
  The use of "dependence" in the title is highly misleading. They don't need the vast iPhone profits to continue operating and be successful.
jackgavigan 11y ago
To put things in perspective, here's a far better graph, showing both both the total revenue and how it's split between the various product segments: http://cdn.macrumors.com/article-new/2014/10/linechart.png http://cdn.macrumors.com/article-new/2014/10/linechart.png
- jackgavigan 11y ago
  It's also worth remembering that Apple's iPhone revenue is bigger than the total revenue of companies like HP, Amazon, Google, Microsoft, and Google and Intel combined: http://uk.businessinsider.com/apple-iphone-revenue-vs-competitors-total-revenue-2015-9 http://uk.businessinsider.com/apple-iphone-revenue-vs-compet...

venomsnake 11y ago

Being one trick pony is a worrying thing, even if the pony is shitting enough gold to make Sir Tywin Lannister jealous. Add the fact that the company has not had a new breaking star since Jobs died and that they are playing catch up with the other players on innovation - the chances of serious trouble in the future - while slim, are not nonexistent.

silvestrov 11y ago
> one trick pony ... a worrying thing Apple does more than the iPhone. They have a profitable computer business too. So it's only worrying thing for Apple if they start relying on that single product. If they keep (fixed) expenses down so they can live without the cash cow, then it's no problem. It's very often the high fixed expenses that get you. Same with people getting a new job where they earn less: the unsellable expensive house is a problem, eating out too often is not an unfixable problem.
- blumkvist 11y ago
  >If they keep (fixed) expenses down so they can live without the cash cow, then it's no problem. That totally depends on how you define "problem". I believe the market will definitely have a problem with the current asking price of the owners for 1 share of the company if the iphone stops being a thing. This will make the owners very worried indeed.
  - HiYaBarbie 11y ago
    A stock market crash is coming either way. Why? Because nothing has been fixed since 2008, the official US unemployment rate is a sham, and so on.
    - dagw 11y ago
      A stock market crash is coming either way A stock market crash is always coming. If you can't say if it's coming next month, next year or next decade, then the statement contains no information.
      - HiYaBarbie 11y ago
        > A stock market crash is always coming. And you complain about a statement containing no information? The thing is, no one knows exactly when a crash will happen. But some people know that one will happen say, within the next five years, and that it's going to be worse than 2008 and 2001 because the underlying problems have only been getting worse.
        venomsnake 11y ago
        The markets can stay irrational for longer that you can stay solvent.
        HiYaBarbie 11y ago
        That's certainly true, but not really relevant :)
        blumkvist 11y ago
        Oh great. More doomsday jibberish. Listen gais!!!! A market crash is comming! I read it on a blog. Brace yourselves! (You heard it here first)
        HiYaBarbie 11y ago
- _nedR 11y ago
  Nobody is worried about Apple's survival. Barring doomsday scenarios, Apple looks set to be a very large, very profitable company for the foreseeable future. Just like Microsoft. They are worried about Apple's growth prospects. Once the Chinese markets are saturated, where next? And if Apple does not innovate, they could end up losing market-share to competitors when they inevitably catch up. Once that point is reached, Apple's only option is too undercut them on price (and with huge cash reserves and market clout, Apple is in a much better place to do this). But this means reduced margins, and shrinking profits (although they may stabilise to very respectable level). Apple has so far avoided this by staying ahead of the competition through innovation, entering new markets with sub-par competition like they did with the iPod, iPhone or creating entirely new ones like they did with iPad and iTunes. Before you say that Apple didn't invent the tablet, the digital music marketplace, or the mobile software marketplace - None of that matters - in real money terms, Apple as good as did. But what new markets are there for Apple to enter? People think the electric car market is a right fit for Apple. The article says that the global premium car market as a whole is currently only worth 220 billion dollars per annum ( don't know whether this includes the premium compact market as well ) which is not much when considering the fact that iPhone's sale for previous 12 months was 100 billion. And the automobile market is highly competitive with plenty of incumbents with over 100 years of experience. Perhaps Apple could transform the business model of the market to make it much bigger, But like with the smartwatch, Apple is possibly late to the game, with Tesla, Google, Uber, all working frantically to do the same (each with their own vision and approach). In my personal opinion, Apple still has plenty of room to enter and exploit the market. In conclusion, investors are worried whether Apple's party of year-over-year growth in revenue and profits which it has sustained over the last decade is finally over.
  - IBM 11y ago
    How does Nike deal with saturation once everyone who's going to buy one gets a pair of Nike running shoes?
    - dagw 11y ago
      Partially by expanding into clothing and sports gear and partially by turning themselves into a fashion company and convincing people that they have to own lots of different shoes in lots of different colors.
tdkl 11y ago
I wouldn't call them one tricky pony. iPod, iTunes Store, iPhone, iPad were all "one trick ponies" and yet they changed the tech.
nnethercote 11y ago
> the company has not had a new breaking star since Jobs died Steve Jobs died less than four years ago. The iPhone is a once-in-a-generation blockbuster product. I think your expectations are a little high.
- TheOtherHobbes 11y ago
  Not so sure. Apple's recent launches have all been clumsy failures. Maps was a disaster, iCloud is no one's darling, Music looks like a dud, Watch isn't even a hobby, and the core line is trapped in a cycle of thinner/lighter/goldier make-overs. Opportunities have been missed. Just one example: Apple could have owned the DIY video content market, as they did with audio podcasts and apps, with all the synergies for hardware and software sales and training that would have created. Instead they've handed it to Google/YouTube. Apple is practically indestructible as a company at the moment, but I can't see the momentum continuing ten years from now without something new and amazing escaping from Cupertino - maybe like Amazon's Echo, but even better. Jobs succeeded because he could always be persuaded to leave a space for users to add content. Podcasts did that, so did apps - and both changed the industry. Cook seems more like a top-down kind of a guy, and less focussed on users. That's not a good thing at all, IMO.
  - minthd 11y ago
    In general i agree - on the innovation front, Apple isn't so strong.But like it did with maps - through the sheer power of investment ,together with owning the platform/user and a bit of time ,now maps dominate IOS mapping apps. Maybe they could achieve some growth by continuing doing that ? Also you mention opportunities being missed. Can you please expand ?
madeofpalk 11y ago
> Add the fact that the company has not had a new breaking star since Jobs died and that they are playing catch up with the other players on innovation To be fair, has anyone had a 'blockbuster breakthrough' in innovation in the past 5 years (since Jobs died)? I honestly think that innovations in consumer tech have more or less stalled as the lower hanging fruit was picked a while ago. What's left are more of the bigger issues, like energy and self driving cars.
- marincounty 11y ago
  I don't think Jobs would be complete happy with computers that are becomming increasingly difficult to repair? I look at that new MBP, and wonder what's serviceable in it? Yes, I know most people don't care about the ease of repair of their computers, but all that adhesive? Call me old school, but I like screws, and a few modular replaceable components. (I don't know what replaceable on the new MBP. It looks like one big motherboard? I might be way off base?) I know Jobs had a great sense of aesthetics, but he seemed like he had a very rational side too? I could picture him thinking most people won't care about repairability on products under a thousand dollars? I don't think he would he would be o.k. with that same philosophy on a 5 grand computer? I think the last thing he would want for Apple products is any scuttlebutt along the lines, "There products are great, until they breakdown?" A major part of their success is the beauty(not just aesthetic) of their hardware? Sometimes, I really do think Jobs was Apple? Sorry, under his leadership, I don't recall many complaints/bugs not actively being solved? Yes, there were always Apple haters, but even the worst complainers had less to complain about--right up to his death? I recall, even when he was in home palliative care; he was still designing/thinking about Apple products? I know he was probally difficult to work for--maybe mean, but I really miss the man!
  - incepted 11y ago
    > he seemed like he had a very rational side too? Remember that he died because he thought a fruit diet could cure his cancer instead of real medicine.
  - madeofpalk 11y ago
huxley 11y ago
For most other companies the iPad, Mac, AppStore, iTunes or even iPod product lines would be considered significant or market leading products. Apple seems like a one-trick pony only in relation to the gargantuaness of the iPhone pony and the relative sparsity of ponies in the rest of the marketplace.
IBM 11y ago
That one trick pony is going to be minting cash for the next 20 years at least, just like the Mac has been for the past 40 years.
- pjmlp 11y ago
  Except the Mac would have died if it wasn't for Jobs return. I remember those failed attempts to rejuvenate the Mac OS and not having any significant Macs sales on my country besides a single importer company on the capital.
  - huxley 11y ago
    Fair but the Apple of today is also a very different company than the Apple of 1996. Before the Jobs/Cook era, Apple used to have terrible inventory management, that isn't a problem any longer. Apple used to be extremely dependent on third-party distributors, they now are one of the most profitable retailers in the world, they also have built wide distribution networks far beyond "computer stores" Back then, Apple had burned through most of the company profits, Jobs and Cook built a tidy trust fund worth approximately $250 billion cash-on-hand Apple is in a far better position now to handle a debacle or stagnation, assuming one was to happen.
- Eric_WVGG 11y ago
  Mac is 31 years old but yes, I do agree that innovations on the scale of GUI desktops and touchscreen pocketable computers take place once every several decades. Interesting that the same company was largely responsible for bringing both of those to market, though...
- minthd 11y ago
  20 years is a long time. What if virtual reality becomes the preferred entertainment method ? What if something other than phones becomes the new status symbol ? What if android manages to create an android status symbol phone or a unique android experiences ? What if due to some apps iMessage loses some of it's power ? what if itunes loses some of it's power ?
mdasen 11y ago
Being a one-trick pony can definitely be worrying. But are other companies so different? 92% of Google's revenues come from ads against 63% of Apple's revenues coming from the iPhone. I think saying that Apple is playing catchup on innovation needs to be flushed out, but you're right that the possibility for serious trouble is slim, but not non-existent. However, is the possibility for serious trouble greater than, say, for Google? Google is facing European regulators unhappy about a single firm controlling 90% of the searches. The iPhone and OS X are going to have ad-blocking with iOS 9 and OS X 10.11. Think of all those iPhone users now blocking ads. The iPhone is 44% of the market in the US. All companies face threats to their future earnings. Walmart faces Amazon and potential wage increases. Apple faces consumers deciding they don't need a new iPhone. Google faces regulatory unhappiness about monopolising information access combined with loads of iPhone users turning on ad-blocking. Heck, Google faces the potential of Apple switching to Bing as the default for the iPhone and drawing a lot of traffic away from Google (and iPhone users tend to punch above their weight in terms of dollars spent and time on device compared to Android users). Microsoft faces everyone moving to mobile and Windows and Office becoming relics of the past. UPS and FedEx face the prospect of Amazon and others using automated delivery methods. The auto-industry could be facing self-driving cars from new entrants including Apple and Google while self-driving technology poses a threat to their very existence as an independent industry. Heck, with self-driving cars, it's simple for anyone with a bit of capital to create a viable Uber competitor in a way that is extremely difficult when recruiting human drivers - Uber could be disrupted before it even becomes profitable. The point being that companies face a bunch of threats to their long-term profitability because of a lack of diversification. It would be great to see Apple more diversified, but I think your suggestion of "slim, [but] not nonexistent" is the right attitude. It would be great if Apple were more diversified, but it would be great if a lot of companies had easy, public answers to how they would deal with a major disruption to their main revenue source. I'm sure Apple is thinking about this a lot.

y04nn 11y ago

The article points out that Apple's high revenue only depend on iPhones sales. And they didn't succeed to diversify.

yoz-y 11y ago
Their graphs would be more interesting if they were not scaled as a percentage. A company that would only make the iPad would still be insanely profitable, the same goes for a company that would only make Macs. Apple's problem is not the diversification, it is that the iPhone revenue is so huge that it eclipses anything they could put next to it.
harywilke 11y ago
The iPhone was a successful diversification.

esolyt 11y ago

How does this article make you so mad? The author does not discuss whether Apple makes enough money or not. Rather, it points out that "gargantuan" profit almost entirely comes from iPhone. > It's a nice touch that both graphs show the iPhone's share of revenue and units sold, rather than totals Yes, because it's the only kind of graph that's relevant in this case.

nnethercote 11y ago
The use of "dependence" in the title is highly misleading. They don't need the vast iPhone profits to continue operating and be successful.

jackgavigan 11y ago

To put things in perspective, here's a far better graph, showing both both the total revenue and how it's split between the various product segments: http://cdn.macrumors.com/article-new/2014/10/linechart.png http://cdn.macrumors.com/article-new/2014/10/linechart.png

jackgavigan 11y ago
It's also worth remembering that Apple's iPhone revenue is bigger than the total revenue of companies like HP, Amazon, Google, Microsoft, and Google and Intel combined: http://uk.businessinsider.com/apple-iphone-revenue-vs-competitors-total-revenue-2015-9 http://uk.businessinsider.com/apple-iphone-revenue-vs-compet...