Microsoft makes huge profits on Windows and Office (and not much else). Google makes profit on advertising (and not much else). Outside of the Gang of Three (add Samsung), most of Apple’s competitors don’t make much profit all. Why not? Because Apple owns the most cash cows.
Quiet Bragging Rights
Most of us Apple followers admire the company for their well honed discipline. Apple isn’t likely to jump on the latest trendy bandwagon because technology pundits say so.
Likewise, Apple is careful about bragging rights, and sticks to basic numbers which are revealed just a few times a year.
For example, in the smartphone arena, Google talks about activations and Samsung talks about shipments, while Apple talks about quarterly sales numbers; units, revenue, profits. Nobody else does that.
Which high tech company is the world leader selling movies, music, TV shows? Amazon, right? Not even close.
Not only does Apple have a cash cow in the Mac line (most profitable computer maker, more profit than next five manufacturers, including Dell and HP), it owns a huge cash cow with the iPhone and iPad (estimates of nearly 70-percent of industry profits). That’s three cash cows the likes of which the rest of the industry does not possess and is in extreme envy (to the point of desperation).
Wait! There’s more! Apple’s App Store is also the largest and easiest way for iPhone and iPad users (and Mac users, if you add the Mac App Store to the mix) to get apps and updates. Some estimate Apple’s take alone at $1-billion a year.
There’s still yet another cash cow that Apple doesn’t talk much about. Apple’s iTunes Store is the largest online retailer for movies, TV shows, and music. A recent press release reveals just how big Apple’s quiet cash cow has become. Not only has the company added more television networks to Apple TV, it also announced that iTunes sells over 800,000 TV shows, and over 350,000 movies per day. Those are huge numbers. And they’re per day. iTunes is a multi-billion dollar industry which dwarfs Amazon’s media sales worldwide, yet you hear little about it when critics claw at the Apple mystique. Then, there’s iBooks, which was revealed to have about 25-percent of the ebook market, yet it’s a horn that Apple doesn’t trumpet, and critics seldom mention, but the division has cut deeply into a field that was once owned by Amazon.
Apple is known for their seamless integration of products, apps, services, and media, but there’s less talk about the media aspect. Even Apple TV, the company’s official hobby, gets short changed when compared to, well, anything. Apple TV works seamlessly with your widescreen TV, Mac, iPhone, iPad and iTunes. It’s loaded with apps that bring in more riches to the company’s coffers.
There’s Netflix, Hulu Plus, YouTube, Vimeo, Flickr, plus HBO Go, MLB, NBA, NHL, and WatchESPN, and many others that make the $99 box a valued addition to the living room. Apple sells millions of Apple TVs each quarter now, while competitors seldom talk about their numbers, or how many customers they have, or even how much media is sold or downloaded.
A business that makes profit continues to survive, and if the profit is enough, the company prospers for many years. Look at Google and Microsoft. They each have a large profit center, and they prosper. Apple has multiple large profit centers, prospers mightily, and yet remains the target of denigrating tech media and stock pundits who cry ‘Apple is doomed.’
Maybe. But not yet. And for those that carry that torch, remember, numbers don’t lie. Apple has more numbers. And more cash cows.