Newsletter #12 (Premium): If Apple was a country, it would be the 8th largest in the world. How do they do it? Strategic Insights from Wiser! Newsletter
With luxury brand margins on a global scale, how do Apple do it?
Apple is the most valuable company in the world.
Apple have built a global business with the scale of General Motors, the supply chain efficiency of Toyota, and the profit margins of Ferrari.
It is hard to think of any other company in the history of the world that has achieved massive scale, WHILST continuing to grow top-line revenues, AND sustain very high margins, YET still driven down costs, WHILST maintaining a position as a luxury brand.
By any measure, Apple is an awesome business.
And Tim Cook is an awesome CEO.
In the decade under his leadership, Apple has added almost $2 trillion in value. And this is after taking over from one of the most iconic, and seemingly irreplaceable figures of all time, Steve Jobs.
In this issue of WiserIn5!, we look at Apple's numbers, products, and strategy, and how it is putting clear blue water between itself and the rest of BigTech.
Apple: by the numbers
Earlier this week, Apple held its Q2 earnings call. Expectations had been high that Apple would report great numbers, but nobody expected them to be as good as they were!
Year on Year, Apple's Q2 numbers were;
- Revenue grew by over 53% to $89.6 billion
- Gross margin increased to 42.5%
- Operating margin increased to 31%
- iPhone sales grew 65% to $47.9bn
- iPad sales grew 79% to $7.8bn
- Mac sales grew 70% to $9.1bn
That's a $1 billion/day in sales at a 42% gross margin!
Apple has almost certainly benefited from the pandemic and the shift to working and learning from home. Unspent cash burning a hole in consumer's pockets has also fuelled Apple's performance.
Especially with the iPhone12, the first to offer 5G, where sales have outstripped expectations.