Last week, Apple's Q3 2019 financial results caused a bit of a hubbub because iPhone revenues were – for the first time in seven years – less than half of Apple's total revenue. The reason is a decline in iPhone sales combined with dramatic growth in two other areas: wearables and services.
But this is hardly the first time Apple has experienced a major change in the shape of its business. In fact, Apple is a company that rarely stood still in terms of development.
To prove the point, let's go through 20 years of Apple business, five years at a time.
1999: Mac comeback
Steve Jobs returned to Apple in 1997, and we all know what happened next. But that transformation took a while. Look at a selection quarter twenty years ago – the fourth tax quarter in 1999 – and you'll see a very different company like Apple today.
First, there was only one Apple product at the time: Mac. 80 percent of Apple's revenue came from Macs, and 20 percent came from other products, mostly Mac accessories. In the fourth quarter of 1999, Apple's total revenue was $ 1.34 billion and generated $ 111 million in profits. To put that into perspective, Apple generated such large revenue every other day every day during the third quarter of 2019.
In the fourth quarter of 1999, Apple sold 772,000 Macintosh computers. We don't know how many Macintosh machines Apple is selling in a quarter now because it stopped releasing sales for devices last year, but it's probably in the ballpark of four million. Keep this in mind when you consider that your Mac is now only about 10 percent of Apple's total business: back when Mac was 80 percent of Apple's business, Apple sold less than one-fifth as many Macs per quarter as in 2019.  2004: Rise of the iPod
2004 was an inflection point for Apple. After the introduction of the iPod in late 2001, sales slowly built … until the end of 2004, when they launched like a rocket. Indeed, the fourth economic quarter of 2004 is the moment before the iPod rocket exploded. It's actually the last quarter where Mac was the bulk of Apple's business. (That's right – the Mac has been a minority component of Apple's total revenue for 15 years.)
The revenue mix at the end of 2004 was 52 percent Mac, 23 percent iPod and 25 percent other products. In the fourth quarter of 2002, Apple sold 836,000 Macintosh computers, more than it sold five years earlier. But it also sold two million iPods, a number to double over the next year.
Apple also grew in general. Growth in iPod sales led Apple to generate $ 2.35 billion in revenue – but only $ 106 million in profits. Apple's explosion in earnings growth was to hang after the explosion in revenue growth, at least a little.
2009: iPhone launches
In 2009, Mac held better than five years earlier, and much – Apple sold 2.6 million Macintosh computers in Q4 2009, three times much like it sold during that quarter five years earlier. And yet, for all Mac success, it had shrunk to just 29 percent of Apple's total revenue.
This was an era driven by exploding iPhone growth and continued strong iPod sales. Apple sold 6.9 million iPhones in the period, and the staggering 11 million iPods. Overall, the iPhone represented 38 percent of Apple's business, and the iPod 13 percent.
Apple's business was also much larger overall. Fourth quarter 2009 generated $ 11.5 billion in sales, more than four times the quarter five years earlier. And when it comes to profits? The surplus had started to flow in torrents. In the fourth quarter of 2009, Apple generated $ 2.2 billion in profits. The money was eventually rolled in.
2014: iPods fade, iPads replace
In 2014, Apple is more similar to the company we see today. The iPhone dominates turnover, with 53 percent of the total. The iPod has disappeared – sales are so small (2.9 million) that Apple has been hiding its revenue in the "other products" category, which in itself accounts for only 5 percent of the total pie. The revenue as a revenue engine is the iPad, which contributes 16 percent to the total. The Mac, which now sells a staggering 4.4 million units (170 percent more than five years earlier!), Contributes 15 percent to the total.
Apple's business exploded between 2004 and 2009, but it is nothing compared to inflation between 2009 and 2014. During the third quarter of 2014, Apple generated $ 37.4 billion in revenue – three times what it did five years earlier! —And $ 7.7 billion in profits.
2019: The Rise of Remnants
That brings us to the last quarter, where Apple generated $ 53.8 billion in revenue and $ 10 billion in profits. While it is true that iPhone sales are declining, Apple's overall profit and revenue trajectory is continuing to rise, albeit in fits and starts. The iPhone, which falls to 48 percent of Apple's total revenue, is partly due to the rapid growth of the Wearables (formerly Other) category, as well as the ongoing growth of the Services line.
Meanwhile, let's not sleep on Mac and iPad. The 11 percent and nine percent of the revenue they generate may seem small, but overall Apple revenue has exploded. In total, they contributed more than $ 10 billion in sales.
Seeing Apple's business change step by step, quarter to quarter, it sometimes makes it difficult to see the bigger pictures. The product lines are rising and falling, but until now the company's overall trajectory this century has been quite dramatic upwards. An important reason for this is a regular addition of new products and services that can grow and compensate for products that have stopped growing or, in the case of the iPod, have disappeared completely.
Apple has come a long way from those quarters in the early 2000s when it couldn't even make a profit. By my envelope calculations, Apple has generated $ 450 billion in profits since 2000, $ 429 billion of it in the last ten years, and $ 277 billion of it in the last five years.