Image Source: Apple.com
Apple reported a “disappointing” holiday quarter (Dec-18) in January, with a slump in iPhone sales attributed to lower-than-expected sales in Greater China, foreign currency weakness , and a weaker upgrade cycle due to further pullback of carrier subsidies and the iPhone battery replacement cycle. Apple CEO, Tim Cook, had already issued a letter to investors warning that the company would fall short of its Fiscal Q1 guidance that it provided in October, which sent its shares tumbling in an overall horrid quarter for tech stocks.
But beyond all of the ‘noise’ and obsession around iPhone sales, Apple reported a number of other stunning statistics that ‘should’ alleviate concerns around the company’s continued influence in the world as the undisputed leader in the amalgamation of hardware, software and services. Here are a few:
Installed Base
Active Installed Base (Measure of Users for all of its Devices): 1.4 Billion (up ~100 million over past 12 months)
iPhone Active Installed Base: 900 Million (up ~75 million over past 12 months)
Services
All-Time Record Revenue in Dec-2018 Quarter: $10.9 Billion
Growth of Services Revenue: <$10 Billion in Calendar 2010 to $41 Billion in Calendar 2018
Apple Music: 50 Million paid subscribers
Apple Pay Transactions in Dec-2018 Quarter: $1.8 Billion
App Store Transactions: Largest single day ever with >$322 Million of purchases on New Year’s Day
Largest News App in the World
Wearables
Wearables (Apple Watch + AirPods), Home, and Accessories: 33% y-o-y growth in Dec-18 Quarter
Wearables (Apple Watch + AirPods): 50% y-o-y growth in Dec-18 Quarter [Both Apple Watch and AirPods were supply-constrained exiting the quarter]
2018 AirPods Sales: Apple does not disclose these numbers but Centerpoint Research estimates Apple sold 35 million AirPods in 2018 - at $159 per pair, that equates to $5.6 billion
2018 Apple Watch Sales: Apple does not disclose these numbers but Strategy Analytics estimates Apple sold 22.5 million Apple Watches in 2018 - at a conservative $375 per watch, that equates to $8.4 billion [Note that Rolex, which is a private company, is estimated to have $4.6 - $5.0 billion of annual revenue, so Apple is by-far the largest watch ‘brand’ in the world, as measured by revenue.]
Apple’s Wearable Business Size: Assuming $5.6 billion of AirPods revenue and $8.4 billion of Apple Watch revenue, Apple’s Wearable Business is likely over $14 billion now, making it a Fortune 200 company.
Apple’s Wearables statistics are especially astonishing because that business did not even exist four years ago, and now it generates the revenue of a Fortune 200 company. Further, it went from $0 to the largest watch brand (as measured by revenue) in the world in a span of less than 5 years. The Apple Watch was decried as a “why would I need one of those?” devices when Cook unveiled it in September-2014 and yet, the company has sold more watches in each successive year after launch. Many are on their 2nd or 3rd version now. We are just beginning to understand the power of this device and its implications for the future of active health monitoring - Apple just completed its heart research study in collaboration with Stanford Medicine and had over 400,000 participants.
So while the iPhone continues to be Apple’s ‘bread and butter’ it is no-less-than staggering how interconnected its products and services are in the world. No other company has the ability to drive an industry and its user base forward like Apple - Steve Jobs has been gone for over 7 years now, yet his vision of creating products that leverage technology to elevate the human aspiration is as strong as ever.