Apple by the Numbers (Premium)

Apple didn’t just post record revenues in the most recent quarter, it outperformed Microsoft by an over 2-to-1 margin. What the heck is going on here?

Lots of dollar signs, for starters: As I’m sure you’ve seen, Apple reported yesterday that it earned a net income of $28.76 billion on revenues of $111.4 billion in the quarter ending December 31. By comparison, Microsoft, the world’s second-largest corporation, the day before reported that it earned a net income of $15.5 billion on revenues of $43.1 billion in the same time period. Maybe I should have added the word “just” in front of those latter numbers. Compared to Apple, Microsoft looks like a side-hustle.

Apple noted that its quarterly revenues were “an all-time record,” which suggests that its net income was not, somehow, a record. The firm saw all-time revenue records in each of its geographic segments. And it reported double-digit revenue growth across all of its top-level product categories.

The financials are interesting if only because we never see numbers this big in financial reports. But more interesting to me is Apple’s ever-expanding user base. This bears some analysis.

Apple said that its total installed base of active devices hit 1.65 billion in the quarter, up from 1.5 billion a year earlier. And that its active installed base of iPhones is now over 1 billion.

Neither number is an accurate tally of the number of users in the Apple ecosystem. The 1.65 billion number is too high, since most Apple customers own multiple devices. And the 1 billion number is too small, though probably not by much. My educated guess is that the vast majority of Apple’s user base owns an iPhone, and that the vast majority of iPhone users own one or more other Apple devices that are counted in that 1.65 billion figure.

So my spitball guess is that there are roughly 1.1 billion users overall. But whatever the real total, the number of iPhone users now matches that of the number of Windows 10 users, at least on paper. (With the caveat that some of those users are on Xbox, or some other sort-of Windows 10 device, and not a PC.) So maybe the number of iPhone users is actually higher.

(And seriously, wasn’t it notable that Microsoft didn’t provide an update on the number of Windows 10 users in its most recent quarterly announcement? Might that number not have gone up a bit given the pandemic and temporary PC sales bump of 2020?)

That iPhone is Apple’s most important product is obvious. It’s the perfect halo product in that it drives sales of other Apple hardware like iPad, Mac, Apple Watch, and various headphones and peripherals, Apple and third-party software, and, most important, Apple services, the latter of which is getting very important to the firm’s ongoing growth.

On that note, iPhone sales were up 17 percent YOY and ... that’s actually surprisingly low given the overall success of the quarter. In fact, among Apple’s major product ca...