Written by Nick Heer.

The Imagined Apple

John Gruber wrote a kick-ass piece on the scale of various parts of Apple’s business:

Apple’s total revenue for last quarter was $51.5 billion. The iPhone accounted for $32.2 billion of that, which means Apple’s non-iPhone business generated about $19.3 billion in revenue. All of Microsoft in the same three months: around $21 billion. All of Google: $18.78 billion. Facebook: $4.5 billion. Take away every single iPhone sold — all of them — and Apple’s remaining business for the quarter was almost as big as Microsoft’s, bigger than Google’s, and more than four times the size of Facebook’s. And this is for the July-September quarter, not the October-December holiday quarter in which Apple is strongest.

Nothing in the world compares to Apple’s iPhone business, including anything else Apple makes. But a multi-billion-per-quarter business here (Mac), a multi-billion-per-quarter business there (iPad), a “Services” division that generates more revenue than Facebook, and an “Other” category (Watch, Apple TV, Beats, iPod) that booked $3 billion in a non-holiday quarter — and it’s clear that Apple’s non-iPhone businesses, combined, amount to a massive enterprise.

The iPhone is such an outsized part of Apple’s business — and, in fact, tech businesses as a whole — that it makes little sense to compare any other part of Apple’s business against it. When looking through the iPhone sales lens, everything else looks like a flop.

Yet, almost every article I’ve come across from writers that see little potential in the success of the iPad Pro or the Apple Watch are declaring them flops by comparing them to the iPhone.1 There’s little question that either product — perhaps even both, combined — will sell fewer units than the iPhone for the for the foreseeable future, but that’s not a realistic sales target. The smartphone is the perfect convergence device. The iPad Pro and Apple Watch are more specialized, and that’s fine: both are good examples of refined and focused products that fit right in with Apple’s other products and ecosystem. Anyone who can’t see their place in the history of Apple’s product lineage is imagining the past or confused about the present.

  1. I’d rather not link to obvious clickbait, but you can find these articles by the dozen if you look. ↩︎