Hacker News Reader

Comment by alt227 | Hacker News Reader

Apple has always been a software first company, and they only sell the hardware as a vehicle to their software. They regularly say this themselves and have always called themselves a software company. Compare their hardware revenues with that of the app store and icloud subscriptions, you will see where they make most of their money.

EDIT: I seem to be getting downvoted, so I will just leave this here for people to see I am not lying:

https://www.businessinsider.com/tim-cook-apple-is-not-a-hard...

View on HN

I did that comparison and they make the vast majority of their money on hardware. Half of their revenue is iPhone, a quarter is services, and the remaining quarter is divided up among the other hardware products.

Regardless of revenue, Apple isn't a hardware company or a software company. It's a product company. The hardware doesn't exist merely to run the software, nor does the software exist merely to give functionality to the hardware. Both exist to create the product. Neither side is the "main" one, they're both parts of what ultimately ships.

Do the same calculation for profit instead of revenue.

Are those numbers available? In any case, comment said revenue, not profit.

> The hardware doesn't exist merely to run the software

Watch this and maybe you might change your mind:

https://www.youtube.com/watch?v=dEeyaAUCyZs

I think he's saying software is essential, not that it's the only thing. He contrasts the iPod with products from Japanese companies, which tend to make great hardware with crap software, and that software difference is why the iPod beat them.

Modern Apple is also quite a bit more integrated. A company designing their own highly competitive CPUs is more hardware-oriented than one that gets their CPUs off the shelf from Intel.

> Compare their hardware revenues with that of the app store and icloud subscriptions, you will see where they make most of their money.

Yes, it's $70B a year from iPhones alone and $23B from the totality of the Services org. (including all app store / subscription proceeds). Significantly more than 50% of the company's total profits come from hardware sales.

Shouldn’t we compare profit? Instead of revenues?

McDonald’s is still a burger joint, even if the soda and fries are far higher margin.

mcds is more of a real estate company - https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burg...

In addition, making money off the software that others develop and sell on the app store doesn't make Apple more of a software company, it makes them a middle man.

IMO a middle man means you are in between 2 other services, taking a cut off the top. In this instance, apple not only created and curate the app store, but also invented the concept. In this case they are definitely not a middle man, they are a software company selling access to their software to developers.

Where are you getting these numbers from, care to share source?

We should be comparing profit on those departments not revenue. Do you have those figures?

It is well known that companies often sell the physicval devices at a loss, in order to make the real money from the services on top.

Apple does not sell hardware at a loss.

Yeah, everyone says stuff like this but nobody can actually produce any reliable sources to show how much profit it actually makes. So until you can, its all guess work.

Apple is a public company. You can find the numbers (broken down into product aka hardware vs service) here: https://www.apple.com/newsroom/pdfs/fy2025-q3/FY25_Q3_Consol...

Feel free to do the maths and prove me wrong then.

The numbers are literally right there. Did you click the link? In the last quarter, they had $67B in hardware sales, with $45B as costs for that division. That’s a profit margin (hardware only) of about 33%. They are not losing money on hardware.

Sure, let's compare.

Apple's product revenue in this fiscal year has been $233B, with a gross margin of $86B.

Their services revenue is $80B with $60B gross margin.

Much of the service revenue is the payment from Google for search placement.

Source?

Good grief. Apple's official financials.

https://www.apple.com/newsroom/pdfs/fy2025-q3/FY25_Q3_Consol...

Look, I totally understand making an off-hand comment like you did based on a gut feeling. Nobody can fact-check everything they write, and everyone is wrong sometimes. But it is pretty lazy to demand a source when you were just making things up. When challenged with specific and verifiable nubmers, you should have checked the single obvious source for the financials of any public company. Their quarterly statements.

Apple has been calling themselves a consumer electronics company since at least 2006.

"Apple views itself as a software company" - Steve Jobs (2007)

https://www.youtube.com/watch?v=dEeyaAUCyZs

Steve Jobs may have said that, but in 2006 I quite by accident ran into some mid-level Apple people at a guest house breakfast. I expressed my dismay at the poor manufacturing quality of my new Mac Book compared to my previous T-series IBM Think Pads. The Apple people politely explained that Apple was a consumer electronics company[1] and I should not expect business-grade products from Apple.

[1] They used that exact term, and it has stuck with me ever since.

It goes back even further, Steve Jobs said Apple is a software company, you just have to buy its hardware to use it. It is the whole experience.

Here is the quote for anyone who is interested:

https://www.youtube.com/watch?v=dEeyaAUCyZs

Apple has always? Sure, maybe today with collection % of sales from apps it looks like a software company. If there was no iDevcies, there'd be no need for app store. Your link is all about Cook, yet he was not always the CEO. Woz didn't care what software you ran, he just wanted the computer to be usable so you could run whatever software. Jobs wanted to restrict things, but it was still about running the hardware. Whatever Cook thinks Apple is now does not make it always been as you claim

You know you might just have a point if you werent completely making that all up.

Steve Jobs consistently made the point that Apples hardware is the same as everyone elses, what makes them different is they make the best software which enables the best user experience.

Here see this quote from Steve Jobs which shows that his attitude is the complete opposite of what you wrote.

https://www.youtube.com/watch?v=dEeyaAUCyZs

Tim is the CEO, he's going to say whatever he needs to in the moment to drive investment.

Apple is and always has been a HW company first.

OK So I guess when the CEO of a company explicitly says something about their company, we should just ignore it because he is 'in the moment'?

Tim Apple is notoriously misinformed about his own company.

I guess Steve Jobs was as well then.

https://www.youtube.com/watch?v=dEeyaAUCyZs

Reply on news.ycombinator.com