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Apple’s Revenue Streams
Apple has multiple revenue streams. The items that are most often noted are: Macs, iPods, and iPhones. However, there are other things that contribute to Apple’s bottom line. The diagram below gives an overview:
[Blue = hardware; Orange = software/services]
Besides the Mac, iPod, and iPhone, Apple makes money in the following divisions:
Accessories
- “Made for iPod” program where Apple receives a 10% royalty.
- Cinema Displays
- Mice
- AirPort
- TimeCapsule
- etc.
AppleTV
- The “hobby”
iTunes Content
- Music
- Videos
- Ringtones
- Audio Books
MobileMe
- “Exchange for the rest of us.”
- Subscription service.
AppleCare
- Extended warranty.
Software
- Mac OS X
- iLife
- iWork,
- Final Cut Studio
- Aperture
- Logic
- Shake,
- Remote Desktop
- WebObjects
- xSan
- App Store where Apple gets a 30% cut of all iPod/iPhone software sold.
Apple has created an entire ecosystem in which it makes one purchase lead to the next. This is part of Apple’s “Halo Effect,” a brilliant business model, and a continuation of Steve Jobs’ Master Plan.
For example, a customer may purchase an iPod, which may lead to purchasing content from iTunes, iPod accessories, and AppleCare.
If satisfied with the iPod, the user may purchase a Mac, which may leads to Mac accessories such as a Apple Display or TimeCapsule; software purchases; and services such as MobileMe and AppleCare.
If the user then decides to get a iPhone, they contribute to Apple’s revenue stream with the potential to purchase from the App Store, in addition to iTunes content, MobileMe, and AppleCare.
CATEGORIES: Business
TAGS: app store, apple, applecare, appletv, iphone, ipod, mac, mobileme
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June 19th, 2008 at 9:52 am
Jesse,good post.
Every Apple purchase I have made has been worth the money, especially Apple Care. I love the Genius Bar. The staffing and everything about the Apple Stores are excellent and once I’m there I (should I say my husband?) usually end up buying something.