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:
- “Made for iPod” program where Apple receives a 10% royalty.
- Cinema Displays
- The “hobby”
- Audio Books
- “Exchange for the rest of us.”
- Subscription service.
- Extended warranty.
- Mac OS X
- Final Cut Studio
- Remote Desktop
- 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.