Apple, the moneymaker (There is no other company like Apple) - August 16, 2015

Apple, the moneymaker (There is no other company like Apple)

Apple has turned into a real success story since 2007 when the very first iPhone generation was released, thus the company merited the most valuable company title due to its $660bn market capitalisation.

The last year released 6th generation iPhone is also very popular which means iPhone is still the primary profit driver at Apple. According to the company’s reports, iPhone sales accounted for 63% of the second quarter’s revenue and recent data shows that in that quarter, 47.5 million iPhone was sold, which is 35% higher compared to the same period last year.

In the first half of 2015, China represented the second biggest market of Apple in terms of revenue and it won’t take long to occupy first place, according to analysts. Analysts predict that if this sales trend continues, China would outrun the Unites States by the autumn of 2016. Even though the company makes the most profit in the US, it sells more iPhone in China than on their domestic market.

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The company’s success can also be measured by its cash record. The iPhone turned into a real cash cow. The product can be sold with an above average margin.

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Source: Apple, Innovative Securities
Even though the company spends on R+D, keeps buying its own bonds, gives higher bonus, the cash kept growing beyond $200bn, the net cash now amounts to $155bn. The major part of this cash is hoarded in abroad and bringing it back to the US would also bring massive tax obligations to the company.

What is this cash amount enough for?

Apple’s cash pile is more than the Microsoft’s and Google’s cash together and $100bn more than the Pimco Total Return Fund’s assets under management which is one of the biggest funds in the world.

If Apple created a new company of its cash (let’s call it iCash) and this new company had the market capitalisation as its cash amount, then it would be the 16th biggest company on the S&P 500’s stock market index. It would have a better rating than companies like Verizon, Bank of America, Walt Disney and Coca Cola.

This $200bn cash equals to Romania’s, Peru’s or the Czech Republic’s annual GDP and on the list of countries by GDP the “Apple country” could be on the 53-54th place.