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Business Model Of Apple
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Non-essential cookies are any cookies that are not specifically required for the website to function and are specifically used to collect user personal data through analytics, advertisements, other embedded content. It is mandatory to obtain user consent before running these cookies on your website.Apple’s business model focuses primarily on selling its products and offering services through subscriptions. Sales of Apple products such as the iPhone, iPad, Apple Watch, and MacBook make up a large percentage of Apple’s revenue, while its services, including Apple TV+, Apple Fitness+, Apple Music, iCloud+, and Apple Arcade, are a smaller percentage of its revenue, averaging $13 billion per quarter. the net
Apple surpassed the trillion-dollar market cap mark through its business model, becoming the first company to achieve such a feat.
Steve Jobs and Steve Wozniak, two college dropouts, founded Apple on April 1, 1976, using Jobs’ garage as their headquarters. He aimed to revolutionize the way people looked at computers. He wanted to make computers small enough to fit in people’s homes and offices. As a result, his first product, the Apple 1 – a hand-built computer -, contained only functional hardware modules such as CPU, RAM and basic text-video chips, and excluded features such as monitors, keyboards and other human interface devices.
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In their second product, the Apple II, expansion slots were added to attach floppy disk drives and other components and human interface devices. This second product increased their sales from $7.8 million in 1978 to $118 million in 1980 (when they went public).
A few years later, in 1983, Wozniak left the company, and Jobs followed suit in 1985 when PepsiCo’s John Scully was named chairman. He was kicked out after he orchestrated a ‘coup’ to remove Scully as a result of growing friction between him and Scully. However, this rebellion backfired.
Steve Jobs founded his NeXT software company after buying Pixar from George Lucas. However, his departure was short-lived and in 1997 Apple bought his company. This was done to bring them back to the company in order to save their declining market shares. The changes he implemented upon his return saved the company from imminent destruction and in 2007 he launched his most successful product, the iPhone.
Since then they have launched other successful products and services, which helped them become the first company to cross the trillion dollar mark, in 2018. In 2020, they doubled their market cap by doubling their most successful business model.
Apple’s Business Model Canvas
According to 2021 shareholder data, Apple’s major shareholders are The Vanguard Group (7.68%), BlackRock, Inc. (6.47%), Berkshire Hathaway Inc. (5.56%) and private investors included corporations such as Tim Cook, CEO of Apple, Arthur Levinson. , Jeff Williams, Al Gore, Dave Adams and Andrea Jung.
Apple’s mission statement is: “To bring the best user experience to consumers through innovative hardware, software and services.” – Bstrategyhub
Apple leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers with products and solutions with innovative design, superior ease of use and seamless integration – 10-K 2017.
Apple makes money by designing, manufacturing and selling smartphones, tablets, personal computers, wearables and accessories. Their main products include iPhones, MacBooks, iPads, Apple Watch, AirPods and Apple TV. They generate revenue by offering subscription services like their iCloud cloud services, Apple TV+ subscriptions, Apple Arcade and iTunes. The company recently announced plans to launch hardware subscription services for its products.
What Is A Business Model With Types And Examples
Furthermore, Apple makes money when users of its products pay a fee to extend their warranties. In addition to their products, they also sell compatible third-party accessories and apps.
As a source of passive income, Apple makes money through in-app purchases on iPhones and through app sales in their App Store – they take a 30% cut from each transaction.
Their biggest and most profitable source of revenue is the sale of their products, however, their subscription services generate higher gross margins compared to product sales.
Through the success of its app, Apple’s business model is worth considering for new entrants into the tech space. However, don’t expect overnight success as Apple has experienced its fair share of challenges with implementing its business model. The combination of Apple’s subscription business model and their product sales is the key factor that determines their massive revenue growth and if you want to adopt the Apple business model, don’t overlook the subscription business model.
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Newsletter Want to receive new business model analysis straight to your inbox? Subscribe now and never miss any new posts! Leave this field blank if you’re human: Today I’m going to talk about value creation and value capture. These are closely related terms when you are designing a new business model or undertaking a business model innovation process.
Value creation is creating value for your customers. The higher the value, the better. Value capture means capturing the value you create and turning it into profit. Examples of value creation and value capture
Google has created a lot of value for consumers by figuring out how to get search to work better. By working out how to integrate AdWords into search it has created a huge amount of value for businesses. It was able to capture a significant amount of the value it created for businesses through the ad auction monetization approach.
Uber has figured out how to create value for car drivers and passengers by connecting them quickly and easily. Passengers got fast lifts. Drivers got extra money. Both have gained considerable value. Uber didn’t capture much of the value (it burned through billions in venture capital money) – let passengers and drivers keep much of the value it created to break through and win market share – it even subsidized them.
Business Model Of Apple
At Standard Oil, JPMorgan has created considerable value for consumers by offering a cheap and reliable source of oil products. By running a vertically integrated monopoly he captured huge sums of value and became one of the richest men in the world.
Gambling companies and casinos create a minimal amount of value for customers – a temporary feeling of success as they win – but they capture a large amount of value from transactions.
Almost everything in business is based on how you create and capture value. There are some differences when we look at it through the business model innovation lens.
We’re looking for ways to create value that’s different from anyone else’s. It could be about creating value in a new way – say a Segway or C5 for personal transport. Or it could be about changing existing ways of creating value – for example, electric and self-driving cars rather than the old car industry model.
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This is a big advantage of the Business Model Canvas, which is the tool I use to do a lot of my work.
You can work through dozens or even hundreds of models, exploring ideas to see how they can create value in new and different ways. Because it is on paper it is understandable and explainable and concise. It doesn’t get drowned out in the din of conversation around the board table.
It’s also worth taking a quick step back to see how the process of creating and capturing value has performed over time.
Paul Verdin and Cohen Taxx created a simple model of how value creation and capture works (and it maps fairly well to the business model lifecycle).
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We have a matrix that matches the value structure and captures each other again. A nightmare position is where you have high sales, but low profitability.
As mentioned earlier this is where Uber is. Next, you have a heavenly position with high (and growing) sales and high profits. Currently, Google, Apple and Facebook are all in this position.
At the next level, the dream, you are a monopoly – officially recognized or not. Many state-owned telecom and electricity companies are in this position, capturing their potential
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