Businessweek has a fun chart showing that Apple’s iPhone business alone would make it the 9th largest stock in the Dow Jones top 30 companies, ahead of such giants as Microsoft, Coca-Cola and McDonalds.
It’s not a terribly surprising fact – the iPhone represents the bulk of Apple’s business, with its $88.4B sales greater than all of Apple’s other products and services combined ($81B), but it is quite a graphic illustration of the strength of that one product line. Apple, of course, just announced that it sold 9M iPhones in the first three days of the 5s and 5c.
Perhaps more surprising is the company that just scrapes ahead of that nominal iPhone business: IBM. While giving every impression of an out-of-date business model, the company is still making billions from large-scale IT infrastructure products, services and software. Including, I kid you not, mainframes.
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Wow! Just wow. Those numbers are insane for a smartphone.
What is not been shown here is profitability…..Sure it looks like Apples’s iPhone rakes in the sales, which places them high on the table……but its profit margin after R&D, manufacturing costs, marketing etc have a huge effect on the resulting profitability of their product. In my opinion, it would be more accurate and helpful to look at the bottom line – to compare apples with apples (excuse the pun). If the the graph was adjusted to show profit per product line, granted the iPhone is well ahead of many of the single profits of the other companies listed, but by way of comparison, I would suggest that Coca-cola at 45 billion in sales might have more gross profit on Coke than does the iphone’s profit after expenses are deducted. Some Apple evangelist is going to say – Cokes numbers are for total product group…….and the iPhone’snumbers are for single product. Even so, the graph is misleading. Simply put, sales are not every thing.