On their fourth quarter earnings call yesterday afternoon, Apple showed that they are still dominant when it comes to technology and music in 2015. Apple has been a leader and innovator in music and technology for years by creating new products, perfecting others, and even joining new markets (streaming). This year, though, has been a record setting year for the company.
According to Billboard.com, revenue was reported at $51.5 billion and net profit was $11.1 billion. This fiscal year for Apple saw revenue growth by 28 percent to 234 billion. Annual net income increased by 35.1 percent to $53.4 billion. Although Apple is not the largest company in the world, the numbers show that they are a powerful entity and are only growing as time goes on. Fortune named the company number 1 on their “Top 10 Most Profitable Companies of the Fortune 50” list this past June.
Apple CEO Tim Cook also briefly talked about Apple Music during the call. He spoke about Apple Music and the number of subscribers using the service, now at 15 million individual and family accounts. In addition to this, there are 6.5 million paying customers. This is about a third of the number who pay for the market leader in streaming, Spotify.
One fact that was not surprising, but definitely worrisome, was that the iPhone accounted for 63% share of revenue. This is obviously a large portion of the company’s revenue. As previously mentioned, Apple does a great job at innovating and adapting to a changing environment. Just five months ago, Apple removed the iPod off their homepage menu bar, a product that sat on the bar for 13 years. iPod sales have been declining for years, and Apple adapted by removing the product from the homepage and replacing it with a Music button. How will Apple adapt to their iPhone taking 63% share?
What will Apple do going forward? How will they adapt? A classic line is, “Once you’re at the top, there is nowhere to go but down.” We’ll see what happens.