Apple iTunes & Accessories Make More than Some Companies Do on Phones... So What?
A new report released by Asymco today pits Apple’s iTunes and hardware accessories revenues against the phone revenues of companies like Nokia, Motorola, Sony, LG, BlackBerry, and HTC. The result? Apple’s iTunes and accessories businesses make more money combined than all of these other companies do selling phones. It’s not the Asymco report’s intention to have that be the major conclusion everyone comes to after reading it. It’s simply making the point that Apple has large revenue channels that other electronics companies don’t, and it made an apples-to-oranges comparison to illustrate how high those numbers were.
But that’s not the headline you’ll see people running today. Many sites will likely tout this as a huge Apple victory, but the truth is that Apple won this a long time ago (by the way, iTunes + Accessories are also outselling Apple’s Mac division). It isn’t news, at least not in the area of competition. And combining iTunes & Accessories and finding the number is larger than another company’s phone sales shouldn’t surprise anybody.
iTunes does a lot of business. And it isn’t just music anymore. There are music videos. TV shows. Movies. And, in case you’ve forgotten, apps. Apple has paid out billions of dollars to third-party app developers alone, and the company has kept a 30% cut of the sales from that channel. There isn’t another app store, save for Google Play, that even comes close to the amount of content contained in iTunes. So should you be shocked that iTunes makes a hefty sum of money? No.
Accessories are another area Apple does very well in. And, before I go any further, allow me to point out that the Apple TV is grouped into Apple’s accessories sales, so these numbers aren’t just accounting for the sales of iPod connectors and earbuds. Apple has one of the best third-party accessory ecosystems in existence, and the company keeps firm control over what is officially licensed for its iPods, iPhones and iPads. But that’s not to say there aren’t a ton of accessories being made and released, because there are. And Apple gets a cut of every single one of those sales. When you go to an electronics store and you see an Apple accessories section that is larger than the section for all other phone accessories, is it really that surprising that Apple makes a lot of money in this area? No.
So you shouldn’t surprised to learn that Apple makes a lot of money from iTunes. You also shouldn’t be shocked that Apple makes a lot of money from accessories. When you combine these two cash cow businesses and get numbers higher than companies like Sony, Motorola, Nokia, etc. can claim for phone sales, it should just be another day at the office. That’s not the major conclusion you’re supposed to reach by reading the Asymco report.
Apple has done a great job diversifying and building up many separate businesses under its large umbrella. iTunes and Accessories are just two of those businesses. There’s nothing more to see here.