I came across this very interesting — and very telling — info-graphic today in my email in-box. I can’t validate the actual numbers used, however given that Apple has over the last several years strategically designed a holistic “ecosystem” that has been engineered at every point to extract dramatically higher (than industry norm) margins, the 3rd graph shown in the series below — the profit one — looks pretty accurate to me.
The thing that is currently keeping Apple in the driver’s seat — for now, anyway — is their all encompassing ecosystem, and their “cult of cool”: devices like iPods, iPads, and iPhones all available through a superior retail experience at the Apple Store, all drawing on paid games, applications, and music from their iTunes store, and all connected, storing, and sharing via the evolving iCloud concept. In the non-proprietary world of Apple, this role is played by dozens and dozens of companies all competing for some kind of market share, and all competing on price — hence shaving their margins at every turn.
Look at the graphic below, and be ready to be blown away. No big surprise how Apple has amassed $100B in cash reserves, and even with dividends and stock buy-backs can hardly make a dent in their piles of cash… amazing.