Here is a simple way to understand what is happening right now with Apple.
It has two business lines that are growing: The iPhone and iTunes software and services, which is music, app sales, and other stuff like iCloud and iTunes Match.
The rest of the business lines — iPads, Macs, iPods, Accessories — are flat, or in the case of the iPod, declining.
We’ve charted out the revenue on a trailing-12-months basis (at each quarter, you sum the previous 12 months’ sales), because this smooths out the chart, eliminating seasonal spikes that happen around the holidays.
(Hat tip to Benedict Evans who talked about charting out the iPad on a trailing twelve months basis on the Andreessen Horowitz podcast.)
So, here we have the iPhone, which is still growing quarter to quarter, despite talks of it slowing down. It won’t be long before it’s a $US100 billion business. For context, Google’s sales on a 12-month trailing basis were $62.2 billion.
The iPad is not doing well. It peaked in Q2 2013, and has fallen. If you remove that quarter, it’s essentially been flat for two years now. The iPad was supposed to be a growing business just like the iPhone.
And here’s the Mac. Admirably, it’s been flat. The rest of the PC industry is contracting, so this is decent. But it doesn’t help Apple grow.
The iPod! It’s in decline, obviously. This isn’t a stunner, but it’s a drag on Apple’s growth.
iTunes, software, and services is growing quite nicely as people buy lots and lots of apps and content.
Apple’s accessories are flat. Nothing to see here.
So, in conclusion, what do we have? We have a strong, growing iPhone business. And that feeds into the strong iTunes sales since iPhone users buy lots of apps. The iPad business, which was supposed to be the next big growth engine is flat. Add it all up, and this is what Apple’s total revenue looks like:
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