How does Apple make money?


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

DivisionProductVolume (million)Market share (ranking)Revenue (million) and growth ratePercentage of revenue
Hardware297,312 +34.68%81.3%
iPhone235.717.4% (#2)191,973 +39%64.57%
Mac27.88.18% (#4)35,190 +23%11.84%
iPad57.834.2% (#1)31,862 +34%10.72%
Wearables and Accessary30.1% (#1)38,367 +25%12.9%
Service68,425 +27%18.7%
App Store63.98% (#1)
Total revenue(#1)365,817 +33%100%

Wearables and Accessary

Apple Watch
Smart home
Apple TV box
AirPort (2018 discontinued)
Accessary and discontinued products
iPod (2022 discontinued)
iPod Touch (2022discontinued)
Cables and line for Apple products

Service division and sub-services

Sub-serviceService 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
Apple Healthcare
Apple Fitness+
Apple Care
Apple Care
Apple Product and Services Bundle
Apple One

2021 performance by region

Revenue ($ million)Annual growth rate
Greater China68,366+70%
Rest of world26,356+35%
Total revenue365,817+33%

Two famous shareholders


Buffett’s Berkshire holds a total of 5.6% of Apple’s outstanding shares at the end of 2021. The value of Apple shares held by Berkshire accounts for 45.95% of the value of listed companies held by Berkshire.

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%.


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.

Credit: Segd

Performance and Valuation

Performance numbers

FY 2021AppleMicrosoft
Annual revenue ($ million) and growth rate365,817 +33.26%168,088 +17.53%
Gross income ($ million) and growth rate152,836 +45.62%115,856 +19.52%
Operating income ($ million) and growth rate108,949 +64.36%69,916 +31.56%
Net income ($ million) and growth rate94,680 +64.92%61,271 +38.37%
Gross margin41.78%68.93%
Operating margin29.78%41.59%
Net margin25.88%36.45%

Market valuation

Market capitalization ($ trillion)2.261.95
Share price139.8261.01
Dividend yield0.66%0.95%
Stock performance in past 5 years (S&P 500 was+57.54%)+228.22%+278.66%

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