Apple explained, in charts 

Tim Cook may have this many credit cards himself.
Tim Cook may have this many credit cards himself.
Image: Reuters/Stephen Lam
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Apple has a bit of a growth problem. Somehow, the company seems like it’s both just getting started, and also out of ideas.

If you look at Apple’s revenue figures, the company is generating a ton of money every quarter—nearly $54 billion in the last reported quarter alone!—but it seems to have hit a plateau in terms of continued growth.

That’s partially because the iPhone—the company’s cash cow, it accounted for 45% to almost 70% of Apple’s revenue in any given quarter over the past decade—is starting to falter.

Apple has also struggled to keep up momentum in newer markets like China and India, which have burgeoning middle classes with disposable income, but aren’t necessarily seeing a reason to pay the premium for an Apple device.

The breakdown of where Apple makes its money has stayed relatively static in recent years. 

Earlier in 2019, Apple halted trading on its shares to announce that it was going to miss its revenue targets for the 2018 holiday quarter, something it hadn’t done since before the iPhone was released. CEO Tim Cook mainly blamed the weak sales in China, but for those following, the writing was already on the wall:

Apple simply wasn’t able to sell more of its products than it had in the past, and with the company generally raising prices on all its major product lines in recent years, consumers were just not as interested. Apple stopped reporting unit shipments in 2019, arguing that individual sales didn’t matter as much as they had in the past since it has devices at so many different price points now. But presumably it also didn’t want charts like this☝️ to keep coming out. And the cash cow that is the iPhone has started to dwindle:

Thankfully for Apple, it has found a few stopgap solutions while it figures out a path beyond the iPhone. Sales of its wearable devices, including the Apple Watch and AirPods, have risen recently, and the company’s increasing push into new subscription services and payments, with Apple Pay, the Apple Card, Apple TV+ and Arcade, as well as sales of games, apps and movies, has helped stem the flow from iPhone revenue:

Most of its businesses, apart from the iPhone, are now growing quite healthily:

But looking to the future, it seems like Apple has more up its sleeve. It has finally started to spend part of the absolutely massive pile of cash it accumulated through years of successful iPhone and iPod sales (though it still has over $210 billion sitting around).

Apple has also dramatically increased its spending on research and development in recent years. Beyond the potential tax breaks this could bring the company, it would seem to suggest that something big is still in the works. It’s spending billions more now each year than in the years leading up to the launch of the iPod or iPhone, and recently upped the amount it spends per year to roughly 5% of its annual revenue.

The company is also growing massively. While some portion of its new employees will be in its retail and customer-service operations, the number of new stores it builds each years has grown pretty linearly.

And then there’s the sheer number of patents Apple has been awarded, which by year rather nicely pairs with its increase in R&D spend and headcount. Not all of these people can be working on designing the new lanyards, shopping bags, and tables that design chief Jony Ive busied himself with.