People must think it is very strange I talk about “how Apple makes money?” This should be common sense. In this post, I’ll talk some, as an investor, must-know (so you may or may not know), but not very clear details of Apple products, revenue, and market share. I hope it will be helpful to many Apple shareholders.
After all, Apple has long in the list of top stocks most-held by American and Taiwanese retail investors. As far as Taiwan is concerned, according to the information released by Taiwan securities companies, in the past five years, it has been the top three Taiwanese holding US stocks. 2021 ranked second and 2020 ranked first.
2021 Performance by division and region
Divisional performance in 2021
| Division | Product | Volume (million) | Market share (ranking) | Revenue (million) and growth rate | Percentage of revenue |
| Hardware | 297,312 +34.68% | 81.3% | |||
| iPhone | 235.7 | 17.4% (#2) | 191,973 +39% | 64.57% | |
| Mac | 27.8 | 8.18% (#4) | 35,190 +23% | 11.84% | |
| iPad | 57.8 | 34.2% (#1) | 31,862 +34% | 10.72% | |
| Wearables and Accessary | 30.1% (#1) | 38,367 +25% | 12.9% | ||
| Service | 68,425 +27% | 18.7% | |||
| App Store | 63.98% (#1) | ||||
| Total revenue | (#1) | 365,817 +33% | 100% |
Wearables and Accessary
| Wearables | |
| Apple Watch | |
| Bands | |
| AirPods | |
| Beats | |
| Smart home | |
| Apple TV box | |
| HomePod | |
| AirPort (2018 discontinued) | |
| Accessary and discontinued products | |
| AirTag | |
| iPod (2022 discontinued) | |
| iPod Touch (2022discontinued) | |
| Other | |
| Adapter | |
| Charger | |
| Cables and line for Apple products |
Service division and sub-services
| Sub-service | Service items |
| App Store | |
| iOS App | |
| iPadOS App | |
| macOS App | |
| Apple media | |
| Apple books | |
| Apple Music | |
| Apple TV+ | |
| Apple News | |
| Apple Podcast | |
| Apple Photo | |
| Apple Advertisement | |
| Apple financial services | |
| Apple cards | |
| Gift Cars | |
| Apple pay | |
| Apple Pay Later | |
| Apple Map | |
| Apple Map | |
| Apple Game | |
| Apple Arcade | |
| Apple Cloud | |
| iCloud | |
| Apple Healthcare | |
| Apple Fitness+ | |
| Apple Care | |
| Apple Care | |
| Apple Product and Services Bundle | |
| Apple One |
2021 performance by region
| Revenue ($ million) | Annual growth rate | |
| America | 153,306 | +23% |
| Erope | 89,307 | +30% |
| Greater China | 68,366 | +70% |
| Japan | 28,482 | +33% |
| Rest of world | 26,356 | +35% |
| Total revenue | 365,817 | +33% |
Two famous shareholders
Buffett
Duan Yongping
Duan Yongping, a prominent Chinese stock market investor who is the majority owner behind Chinese phone brands Oppo and Vivo, also owns a large amount of Apple stock. He has publicly disclosed more than once that Apple and Kweichow Moutai are his two largest holdings. Duan Yongping said in 2020 that Apple is the most profitable company in his investment.
Business diversity
I mentioned in section 3-2 of my book “The Rules of Super Growth Stocks Investing” that iPhone sales revenue as a percentage of the company’s revenue has dropped from 70% at the peak to the second quarter of 2019 In 2015, the iPhone sales revenue accounted for 66% of the company’s revenue, and in the fourth quarter of 2016, it accounted for 70%. The ratio is 69.36%.
Huawei
Everyone must think that the entire mobile phone industry has not had any major innovations or breakthroughs in the past two or three years. Why can Apple’s iPhone suddenly surge in the global mobile phone market from about 15% to 25% in the fourth quarter of recent years and won the throne of global mobile phone shipments? The main reason is geopolitics.
Because the United States has imposed a semiconductor embargo on Huawei, even Huawei is publicly praised by Apple’s CEO, it is Apple’s biggest competitor, and it has surpassed Samsung to take the first market share in Europe, plus Huawei’s own super mobile phone chip design capabilities (Huawei’s HiSilicon is one of six IC designers in the world capable of designing chips for mobile phone modems). End up Huawei has no chips for new mobile phone due to US embargo.
According to IDC statistics, in the second quarter of 2018, Huawei’s market share was 15.8% and became the second largest mobile phone supplier in the world for the first time, surpassing Apple for the first time. According to reports from Strategy Analytics, Counterpoint Research and Canalys, Huawei’s mobile phone shipments surpassed Apple’s in 2019, making Huawei the second-largest mobile phone supplier in the world. In 2019, Huawei’s mobile phone shipments were about 240 million units, Apple’s nearly 200 million units, and Samsung’s 300 million units.
In 2021, Huawei have only 6% of the high-end mobile phone market, vs. 13% in 2020. The rapidly declining market in the past two years has actually been replaced by Apple, because basically the market share of other mobile phone manufacturers has not changed much.
Performance and Valuation
Performance numbers
| FY 2021 | Apple | Microsoft |
| Annual revenue ($ million) and growth rate | 365,817 +33.26% | 168,088 +17.53% |
| Gross income ($ million) and growth rate | 152,836 +45.62% | 115,856 +19.52% |
| Operating income ($ million) and growth rate | 108,949 +64.36% | 69,916 +31.56% |
| Net income ($ million) and growth rate | 94,680 +64.92% | 61,271 +38.37% |
| Gross margin | 41.78% | 68.93% |
| Operating margin | 29.78% | 41.59% |
| Net margin | 25.88% | 36.45% |
Market valuation
| 6/29/2022 | Apple | Microsoft |
| Market capitalization ($ trillion) | 2.26 | 1.95 |
| Share price | 139.8 | 261.01 |
| P/E | 22.72 | 27.23 |
| Dividend yield | 0.66% | 0.95% |
| Stock performance in past 5 years (S&P 500 was＋57.54%) | +228.22% | +278.66% |
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