Apple’s Innovative Revenue Strategy

Oct 19, 2010
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Apple may be one of the best case studies about the importance of innovation in the past ten years. Smart people know there is a difference between invention and innovation. When a company focuses on innovation and excels in bringing innovations to market they reap the financial benefits.

As Horace Deidu of Asymco points out 60% of Apple’s fourth quarter revenue came from products that didn’t exist three years ago. Looking at the chart below you will see that the iPhone and the iPad represented the bulk of Apple’s fourth quarter revenue and you can expect that number to be even larger after the holiday quarter which is traditionally Apple’s best quarter.

Chart Source: Asymco

This chart shows how important innovation is to Apple. In fact I would contend that their entire corporate turnaround was rooted in their innovation in portable music with the iPod.  As Horace points out prior to 2001 the orange band representing Mac sales was Apple's only revenue stream.

Despite all the Wall St. Analysts complaining iPad sales were disappointing since they estimated 5 million and Apple sold 4.1 million it is still staggering to see how a product category that didn’t even exist a year ago for Apple is now generating such incredible revenue and sales.

Innovation will be the key to competing in consumer technology markets. All of this just emphases the tech industries old adage “innovate or die” and Apple innovates as well as anybody.

[Source: Asymco]


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