Macs, iPads Can't Replace the iPhone Cash Cow

By Don Reisinger  |  Posted 2011-04-21 Print this article Print

5. Its importance keeps growing.

Even worse, Apple's most important product, the company's smartphone is becoming even more important by the day. As noted, the iPhone's revenue represented just 18 percent of its operation two years ago. Now that that figure stands at 50 percent, one might wonder how much higher that figure will go. The more the iPhone contributes to Apple's revenue, the worse it could be for the company.

6. Can it be the iPod?

Luckily for Apple, it has been in a similar situation before. When the iPod was at its height, the device was integral to the company's operation. As sales started to wane, some wondered what would come of Apple. Then the iPhone changed all that. Apple's charge now is to make the iPhone another iPod. Surely the company's smartphone can't be so popular forever. Eventually, Apple will need to come up with something else to carry its banner.

7. Macs won't cut it.

Let's say that the worst happens and iPhone sales start to plummet. Apple would need to rely upon other aspects of its business to buoy its operation. Chances are that would mean hoping Mac sales could cushion the blow. The only issue is that it won't be able to do so. Macs made up just 20 percent of Apple's revenue in the last quarter. Two years ago, it accounted for 36 percent of the company's revenue. In other words, Macs are losing their importance at Apple. If the bottom falls out of its iPhone business, Macs won't be able to hold it up.

8. The iPod won't cut it either.

The iPod is another business unit that has witnessed its importance suffer greatly at Apple over the years. Just two years ago, the iPod made up 20 percent of Apple's revenue. In its most recent quarter, it accounted for just 6 percent of its revenue. Worst of all, demand for that device is waning. If the iPhone business starts to decline, it's tough to see how the iPod, once one of Apple's most important products, could help the company in any way.

9. It's the Apple of the investors' eyes.

As a public company, Apple has a responsibility to maximize shareholder value. As its revenue and profit figures continue to climb, it's proving quite effective at that. But if trouble starts to arise in its iPhone unit, it wouldn't take long for investors to sell off their shares and opt for something with more upside potential. That ripple effect-poor iPhone performance followed by a massive sell-off-could create turmoil at Apple, including management shake-ups, drastic product decisions and other issues that could have a long-term, negative impact on its operation.

10. It's Steve Jobs' creation.

There might be teams of people at Apple that are involved in the development of products, but when it comes to the iPhone, one person-Steve Jobs-was integral to its creation. However, Jobs is currently away on medical leave, and there's no telling when he might come back. If he is not involved in future iPhone models, there's no telling what might come out of it. And there's no telling how appealing those devices might be. As investors and analysts witnessed in the company's latest earnings release, as the iPhone goes, so goes Apple. It's important that all stakeholders keep that in mind. 


Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Since then, he has written extremely popular columns for, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at

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