Where does Apple’s cash flow come from?
Being predominantly known for its excellent hardware you would be right in thinking most of Apple’s revenue comes from selling hardware such as the Macintosh.
With a total revenue predicted to be between $49 billion and $52 billion for the final quarter of 2017 Apple is one of the biggest Tech Giants out there with greater revenue than Facebook and Amazon.
So if other manufacturers are selling their hardware a lot cheaper than Apple with hopes to make money on the downstream with App purchases, Music and Video sales why does Apple do so well in selling higher priced hardware?
The simple answer is quality and durability, yes even Apple has had the odd lemon due to manufacturing faults or blue sky thinking were the dream outweighs the technology, but on the whole Apple makes the best hardware on the market and thanks to it’s longevity carries on to make some revenue from the devices.
Apple has fixed most of the manufacturing bugs by using contract manufacturers that have to produce the product at the agreed price and quality rather than making up any shortfalls in manufacturing itself, which can be costly and time consuming, instead Apple now focuses on design and development, making the products we love.
Apple also used it’s good fortune with iDevices such as the iPod and the iPhone to promote it’s products and brand by having either dedicated retail outlets or in store technicians and salespeople to help boost consumer confidence and brand awareness.
Plus in today’s culture of conspicuous consumption a higher priced product with a better design is a key selling point as celebrities also flock to the brand.
As the future comes and technology creeps into more aspects of day to day life Apple is striving ahead with driverless car technology and smart homes using Apple home.
I look forward to seeing more Apple products in day to day life although I am not sure I am ready for an autonomous system to transport me from A to B presently that is a leap of faith to far.
