Apple’s top 5 most profitable business segment

On January 3, 2022, during an intraday trading, the mcap of Apple surged past $3 trillion. But how does Apple earn so much? The answer lies in the performance of its various segments.

Apple started in 1976, is now the world’s leading mobile manufacturer. Started in a garage, Apple is the first company in the world to have a market capitalization of $1 trillion in 2018. On January 3, 2022, during an intraday trading, the mcap of Apple surged past $3 trillion.

But how does Apple earn so much? The answer lies in the performance of its various segments.

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Let’s take a look at Apple’s most profitable business lines:

1. iPhone

iPhone is the main product of Apple, the company earns major profit from sales of the iPhone series. Every time the company launches a new iPhone it creates a new standard for the smartphone market.

The company reported a net sales for iPhones of $192 billion in FY21, in the previous year the company recorded net sales of $137.8 billion. In the Q4FY21, net sales surged 47% to $38.9 billion from $26.4 billion in the same quarter the previous year. iPhone 13 is the latest addition in the iPhone unit.

2. Services

Apart from stores in urban cities, Apple has a strong presence over the internet with its App Store & Apple Music. Apple basically earns money from selling & subscription of its services. The services include AppleCare, Apple Pay, AppleCare Warranties, iCloud, Apple Music, Apple TV+ and Apple Arcade.

Revenue from services surged to an all-time high of $68.4 billion in FY21.

3. Mac

Mac is Apple’s widely popular computer series. The sales of Mac were reported to be $35.1 billion in the fiscal year 2021. Mac’s contribution to the growth of Apple has significantly fallen as the desktop & laptop industry was impacted due to chip shortage.

4. iPad

Apple launched the first iPad i.e. a table in the market in 2010. Since then, Apple has been dominating the tablet market. In 2021, Apple sold the iPad worth $31.9 billion. In Q4 the sales from iPad was $8.3 billion.

5. Watches & other accessories

Image courtesy: Apple.com

The wearables & accessories of Apple have been growing at a tremendous speed. Smartwatches, AirPods, cases & back covers are in high demand. The revenue from this segment in FY21 was  $38.4 billion, in the previous year it was $30.6 billion.

These were Apple’s five most profitable segments.