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Perspectives on building technology businesses and AcceleratorIndia from Cartezia

iPhone drives doubling of Apple's revenues from 2007 to 2009

Tuesday, March 16, 2010

Apple’s latest results, based on corrected SEC filings, show that the company’s strategy of adding new product innovations every 2-3 years, while maintaining revenues from older product lines is working brilliantly. Apple’s total revenues nearly doubled from 2007 to 2009, growing from just over $24bn to nearly $43bn in 2009. And in the same period, margins improved from 14% to 19%, no mean feat given the tough market conditions.

 

   

 

These results were largely driven by a staggering growth in iPhone revenues from virtually nothing in 2007 to over $13bn in 2009, whilst either maintaining or managing small declines in older products. This 3-year period saw a dramatic change in product mix. The older Mac products showed continued small declines in revenues. iPod revenues fell off slightly but there was a steady increase in revenues generated by the iTunes service. But it was the explosive growth in iPhone revenues, where Apple have established another new product category in smartphones, and challenged the business model which favoured the incumbent carriers and the older phone suppliers such as Motorola and Nokia, which really powered these financial results.

 

 

 

 

And while many speculate about how the iPad will be received by the market, the reality is that this device will add another ‘new’ product category to the mix, and is likely to drive revenues higher again. The secret, of course, lies in delivering the right level of product innovation at the right time, rather than world-beating technology and competing aggressively on price.  Something all technology companies could learn from.