February 12, 2013

Accessories and iTunes Mean Big Money for Apple


While Apple stock has taken a bit of a tumble in recent days, there's still plenty of profit to be had in Apple. A recent analysis from Asymco took a look at Apple's profit profile and compared it to several other mobile phone makers and discovered something very unusual: when it comes to profit, Apple makes more from just accessories and iTunes combined compared to other companies in the market which make their profits from phone sales alone.

Apple's total revenue from iTunes and accessory sales represented fully $5.5 billion for the first fiscal quarter of 2013, according to the latest earnings release. That actually represents a larger total number than the total revenue realized by Nokia, Motorola, Sony, LG, HTC and BlackBerry. Only one company could stand up against the revenue realized by just two parts of Apple's business, and that was Samsung. Moreover, the revenue generated by iTunes and accessories for Apple represent more than the income made from Microsoft's Windows Phone and Xbox divisions combined.


Image via Shutterstock

The analysis further revealed that the revenue realized from iTunes represented the fourth largest business Apple had in its overall quiver, leaving the iPod behind two years ago. Comparing the growth of iTunes to the Mac's numbers suggests that the iTunes business could well become the third largest part of Apple's business by the end of 2013.

This comes hot on the heels of the revelation that Apple was closing in on a billion dollars a year in income just from the payments Google makes to Apple to keep the Google search engine as the default search engine of iOS hardware. By the end of 2014, meanwhile, it was suggested that that number may well clear the billion dollar mark.

On a certain level, it makes sense. Apple's primary product line looks more and more mobile with every passing year. While there's still plenty of action in the desktop department, and of course in the MP3 player department, the growing parts of the enterprise are clearly the iPad, the iPhone, and the assorted variety of content that accompanies these devices. There are so many separate parts of iTunes that it makes sense to see iTunes represent such a large portion of the whole. The music, of course, but also the movies and TV shows, the books, the podcasts—and of course, the endless array of apps—all adds up to make a picture that's increasingly weighted in that direction.

Apple's increasing focus as a mobile company helps change the picture, and the sheer amount of profit Apple's pulling in from those divisions—increasing mobile device proliferation and support for the software found on those devices (and the assorted cases and keyboards and the like that goes with them)--only helps to cement the perception all the more.




Edited by Brooke Neuman



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Google    Microsoft    Apple
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