Facebook Twitter LinkedIn Google Plus RSS
Suitable for Work

iPhone alone is bigger than many companies, or How I learned to stop worrying and love the rumors

By ,
Apple iPhone 5S
Apple iPhone 5S - ()

A company as large as Apple, with $41.7 billion in profit in 2012, is bound to inspire both critics and rumors. And if critics and rumors alike are right, what does it mean for the future of the largest consumer electronics company on the planet?

Ben Rooney reports at the Wall Street Journal that the 16GB iPhone 5S is constructed from $213 of components, or only 32 percent of the unlocked, out-of-contract retail price of $649.

That's a good deal for Apple.

Now, of course the iPhone line of smartphones has always been a strong revenue driver for the company.

But what isn't as obvious is that many of the biggest businesses in the world can't even touch the iPhone alone in terms of quarterly revenue. In fact, Apple's iPhone unit alone is a titan in the industry.

Last week, Eric Chemi of Businessweek reported that iPhone, if it were its own independent business, would outrank more than 400 of the companies on the S&P 500. iPhone revenue alone dwarfed total revenue brought in by Amazon, Comcast, Microsoft, Google, Goldman Sachs, and more.

With $88.4 billion in annualized revenue, iPhone makes more money for Apple than all of its other products combined.

That is bleeping crazy.

I know I'm using a lot of italics in this post, but sometimes there's no way around it.

Apple doesn't seem to be too concerned about the tendency of many in the press to pronounce its imminent demise. And a year-over-year decline of nearly 26 percent in its stock price doesn't appear to have caused any outward panic by the company well-known for its inspired and patient iteration of existing products.

Rumors continue to swirl about both an iWatch and an iTV. Whether those or others prove true in the long-term, it's safe to say Apple doesn't plan to ride out its golden iPhone goose forever. Yes, they like to iterate, but don't let the steady march of mostly small (but often impressive) improvements shroud their penchant for playing the long game on industry-changing innovation.

They're still also setting trends with moves like their introduction of the gold iPhone (depending on how comparable you think the iPhone is to a 2007 Samsung flip-phone...) and the idea that a premium device like the iPhone 5C can be "unapologetically plastic," (depending on how comparable you think the iPhone is to nearly every other smartphone ever).

What has always amazed me about the company is that they're not much for inventing bold devices we've never seen before. They're too smart for that.

Instead, Apple waits and watches as less patient and refined companies launch rough-edged, half-thought-out products that may find a niche market but never capture that spark that makes a gadget bigger than most of the S&P 500.

Then, they ask why the thing failed, or didn't "succeed bigger" and then, eventually, they enter the market with, not the first, not the only, not the original, but the very, absolutely, indisputably and overwhelmingly best iteration of that idea that anyone has ever seen.

They did it with computers, music players, mobile phones, and tablets. They're the BASF of tech.

And one of the common threads I see throughout their work is the improvement of the stuff we use all day, every day. That's why I don't think that watch or television rumors are very far-fetched at all.

But one thing is certain: when your flagship product outperforms many of your colleagues and competitors, you can afford to think as differently as you'd like.

More Suitable for Work

Write to the Editorial Department at editorial@njbiz.com

Related Stories

Leave a Comment


Please note: All comments will be reviewed and may take up to 24 hours to appear on the site.

Post Comment
View Comment Policy