Seldom discussed in the digital trade rags is Apple’s penchant for making money and spending money. Money is the golden key which unlocks even more riches; stock price, stock dividends, record revenue and profits, and an ever improving product line.
It’s All About Money
As much as Apple executives talk about how they– the company– love to design and build products that customers love to use, money is still at the heart of how Apple does what it does.
For the moment, Apple is basking in the richness of success; record stock price, record dividends, record sales– but all that it is tied to money.
First, Apple had to bet the farm a few times on new products during the Second Coming of Steve Jobs. Remember, in the early days of the iPod, Apple was barely profitable. The success of iTunes, iPod, and the iTunes Music Store brought in ever more profits, which set the stage for another bet the farm moment. The iPhone.
Even the iPhone was not an overnight success. Only 10-million or so were sold in the first year. That’s about the number that get sold every 10 days now. Apple’s iPod and Mac profits were funneled into the iPhone’s development. Profits from that success were funneled into the iPad’s success, and together, all those components resulted in greater sales and profits for the Mac and other products.
Yes, you need to spend money to make money, but Apple has the money; more of it than Microsoft, Samsung, Google, and every other smartphone, tablet, and probably PC maker combined. Apple’s ‘golden key’ to success is money, which is used to develop new products, invest in new manufacturing capabilities, and to create a cohesive ecosystem where every product is leveraged by every other product.
Nobody else does it Apple’s way.
Through the years, Microsoft has spent tens of billions of dollars to diversify beyond Windows and Office? Fortunately, that twin cash cow keeps the company buoyant but little else. Google has devoted tens of billions to expand beyond being a search engine advertising company but well over 90-percent of revenue and profits come from the same old same old.
Elsewhere among Apple’s competitors, struggle is the name of the game. All that keeps Google and Microsoft going are the ill gotten gains from near monopoly businesses that are straining and teetering along as the market changes toward mobility devices. Despite spending tens of billions to be like Apple, Samsung’s smoldering moribund smartphone and tablet business is being eaten alive by smaller competitors willing to forego profits for future fortunes.
It won’t matter. Without profits from sales those companies are merely delaying the inevitable because it’s money that’s the key to unlocking even more money.