It occurred to me that there might be an interesting visual way to compare how Apple and Microsoft make money. Doing so highlights Apple’s tenuous position, despite its much higher revenues today, while highlighting why Microsoft’s more diverse business is the safer long-term bet.
The impetus for this is similar to that I employed last November in Missing the Point with Charts (Premium). Then, as now, Apple and its followers seem a bit over-eager to buy into the fantasy that the firm’s rapidly-rising Services business will in some way counter the negative impact of lower iPhone sales. This sounds plausible only if you’re trying to dupe the public or simply don’t know what you’re talking about: Apple’s Services business needs to grow many-fold, and quickly, before it will ever compete with iPhone, revenue-wise. And that growth is already slowing.