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Apple’s New Money-Maker

Published on 30 May 2019 / In Other

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Today we’re going to talk about Apple’s new money-maker. Because although Apple is generating tens of billions in revenue, their performance over the holiday season disappointed investors since a slow down in the Chinese economy and slower than expected iPhone sales caused Apple to reduce their earning expectations by about 8 billion dollars. So with the iPhone market becoming heavily saturated, Apple has been under pressure to find other ways to make money, especially since the iPhone is responsible for about 60% of Apple’s total revenue.

So like I said before, we all know that the iPhone is Apple’s cash cow, and it was the primary reason why the company was able to reach a trillion dollar valuation in 2018. But it’s unreasonable to believe that iPhone sales will continue to grow forever. And this is because a market for any piece of hardware will eventually become saturated, which means everyone who wants that device will eventually buy it and sales will inevitably slow down. Now it may seem like that’s not a big deal since iPhone owners will continue to upgrade their device every 2-3 years, but that isn’t the way companies like Apple see it. To them, If a market isn’t growing its shrinking. And this is very frightening to investors since their money won’t grow with a company that is stagnant. But I should mention that this is not a problem exclusive to Apple. It’s a challenge every hardware company has to face at some point in their product’s lifetime.

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