Francesco Schiavon sent me a link to a PDF the other day and told me to take a look at it. Francesco is one of our star trainers at NonLinear Educating Inc., and he's also one of my long time mentors ... when Francesco tells me to do something, I do it. This is the Link he sent:
The PDF at this link shows Apple's Revenue and sales by unit for Q1 2010. A quick look at it shows the following:
Combined iPhone & iPod Sales: 29 Million Units & $10.1 Billion in Sales
Combined Computers & Software: 3.3 MillionUnits & $5.5 Billion in Sales
Apple makes twice as much money from iPhones & iPod sales as it does from computer & software sales. Even more interesting, software sales (at a paltry $631 million a year) makes up less than 4% of Apple's revenue. Wow.
Have you noticed lately that Apple software revs (goes to the next version) much slower than it used to? In the past software would typically rev on a 1 to 1.5 year basis. There was always a lot of hype about when the new version of the software would ship, and what features would be found in it. Rumour sites popped up everywhere to facilitate endless gossip on these topics. People were happy to be a part of it all ...
These days the period between software revs is getting longer and longer ...the window is increasing to 2 years at minimum, and sometimes more! Even hardware like laptops and towers go long periods of time with nary a processor update. From my friends on the inside I hear that software development teams are being downsized, programers are being laid off or repurposed (usually to iPhone products), and in general the focus of the company is changing ... why?
Much of this can be put down to the maturing of Apple's software and hardware product lines. Let's face it, Final Cut Pro is a full featured video editing app that pretty much does everything it needs to already. What else is there to put into it? And Moore's Law which said CPU power doubles every 18 months (a law which held true for nearly 40 years)broke down at the beginning of this century. It's been over 8 years now since CPU speed doubled in a single 18 month stretch, and for the last 5 years speeds have barely increased at all. The technology is reaching it's limitations ...
But the real story rests in the numbers. If you make double the revenue from one product line than you do from another, it pays in spades to put your development resources there. iPhones and iPods pay big time. Software development doesn't.
The writing is on the wall. As Apple goes forward they are clearly becoming a consumer electronics giant along the lines of Sony or Panasonic. The focus on software and computer applications is shifting.
It's going to be interesting to watch Apple as the next few years unfold. What's coming next? Maybe flat screen TVs that network with your other Apple devices? What else could there be? Apple Fridges and Apple Toasters? Who knows ... but one thing is sure, Apple is now a consumer electronics giant and we can expect to see more consumer devices coming in the future.