However, the company also has stakes in hardware, gaming, search, and a social network (LinkedIn). Microsoft’s business model primarily revolves around software and cloud computing. On the other hand, most consumers may only purchase a new iPhone or device once every few years. These subscriptions generate stable, predictable revenues for Apple. Next, many of Apple services are subscriptions in nature: AppleCare, iCloud, Apple Music, Apple TV+ all charge recurring annual or monthly fees for users to continue using their services. The first is that the Services segment is a high-margin business compared to Apple’s other product hardware categories Apple’s Services segment generates gross margins of 70% compared to 35% for Products.

Services is the next biggest segment and is increasingly becoming Apple’s key growth driver. The success of each new version of the iPhone will continue to play a major role in Apple’s financial performance. This is no surprise as the iPhone remains the most popular smartphone brand around the world. Services include sales from the company’s advertising, AppleCare, cloud, digital content (App Store), payment, and other services.Īs you can tell straightaway, the iPhone remains Apple’s crown jewel and largest revenue contributor.Wearables, Home and Accessories includes sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories.The iPhone, Mac, and iPad categories are self-explanatory.Apple splits its business segments into key product categories – iPhone Mac iPad Wearables, Home and Accessories and Services. Let’s have a look at Apple’s segmental revenue to better understand its business model. Apple’s business modelĪpple’s business model primarily revolves around consumer tech and hardware. In this article, we’ll discover why are Apple and Microsoft no longer primarily compete with each other, and which has a ‘stronger’ business model. However, despite their past competition, both companies are no longer rivals like they once were. It’s easy to think that Apple and Microsoft remain the other’s prime opponent to this day. – and remain dominant companies in their industries. By the 1990s, Microsoft had won the home computer war (Windows still holds a 73% market share in desktop operating systems worldwide), but Apple stormed backed in the new millennium with the invention of the iPhone which launched a whole new ecosystem of ‘apps’ and the age of mobile computing.Īpple and Microsoft are still tech giants today – they regularly swap top position as the most valuable public company in the U.S. Both companies were founded in Silicon Valley in the 1970s and were fierce competitors in the home computer market in their early history. Apple versus Microsoft is one of the most famous and storied rivalries in corporate history.

Apple vs pc market share