What Happens To Apple If The iPhone Fails?

September 13, 2012 in Daily Bulletin, Signature

Yesterday Apple previewed the latest model of the iPhone. The company has grown by leaps and bounds in recent years, so even if the iPhone 5 ends up disappointing consumers it shouldn’t be too big a deal for Apple right? Not so argues Henry Blodget. Apple’s future depends on the iPhone doing well:

  • Apple’s legal battles with Samsung forced the company to release detailed financials. They showed that Apple depends on the iPhone for almost 66% of its profits.
  • The iPad generates about another 15% of the company’s profits.
  • Tim Cook talked up the post-pc era, but Apple better hope that this future isn’t driven by iPads. The cost of making the device is so high and its price is so low that if the iPad became Apple’s dominant product, its profit margins would be crushed.
  • All of this means that if the iPhone fails then Apple’s financials will take a steep dive. The company’s future is entirely dependent upon the success of this one product.

Read more about these estimates, what experts have to say, and a fascinating graph that visualizes the profits from Apple’s different products over here.

Source: Business Insider