Let’s talk numbers. Big numbers. Apple has about 1.3-billion iOS users, perhaps a billion or so customers, but now admits it has 250-million paying subscribers. Subscribers? Think Apple Music, iCloud, App Store apps (many are becoming subscription services with in-app sales), and more. Apple CEO Tim Cook says about 30-million new subscriptions are added every quarter.
What about Amazon? The online retail giant has some big numbers of its own and, yes, they are subscription-based. CEO Jeff Bezos says Amazon Prime just passed the 100-million subscriber mark. The monthly Prime fee went up to $12.99 but the annual membership remains at $99.
Basic math tells me Amazon rakes in nearly $10-billion a year. Just from the Prime subscription fee. And, yes, many billions more on what those Prime users buy from Amazon.
A quick look at their respective stock price and financials indicates a difference in their big numbers. Apple’s stock price is around $165 while Amazon exceeds $1,500. Apple’s market cap is pushing $900-billion while Amazon now tops $700-billion. The P/E, price-to-earnings, ratio is $16 for Apple, $332 for Amazon.
Apple’s bigger number is profits.
Amazon has more than 350-million customers while Apple tops 1-billion or so. By comparison, Netflix has over 100-million customers. Yes, many of them are paying customers. By comparison, Netflix has a market cap less than $150-million and a P/E ratio of $195. Netflix profit last year was barely half a billion dollars. Amazon earned less than $3-billion last year. Apple earned more than $60-billion.
While all the technology giants we pay attention to among Apple Villagers are wildly profitable with giant cash hoards, Apple sits on top. High on top. Most of the company’s revenue and profits come from iPhone and it would be difficult to argue that iPhone is not the stimulus behind AAPL’s meteoric rise in recent years, but everything else Apple makes sells in big numbers relative to the market segment where it resides.
iPhone takes home half the smartphone industry’s revenue, and 85-percent of the profits. The Mac owns 50-percent of the entire PC industry’s profits. iPad, too. Watch is the best selling smartwatch.
Guesstimates say the expensive Apple TV has barely 20-percent of the streaming gadget market– against Roku, Fire TV, Chromecast, et al. But at an average of more than three times the price tag, can you guess which device has the most revenue and profits?
In only two months, Apple’s HomePod is said to have barely 10-percent of the so-called talking speaker market against Amazon Echo, Google Home, and Sofos. But at $350 each HomePod may have half Amazon’s revenue already for 2018 and that means gross margins and higher profits.
Yes, all those competing technology giants have big numbers. Apple’s numbers are bigger.