While the beautiful hardware that Apple creates gets a lot of the attention, many people forget that the appeal of Apple’s devices is within the software more than anything else. Asymco.com recently published an article elaborating how the profit from Apple’s two operating systems (OSX and iOS) outpace the profits that Microsoft makes with Windows 3.5x over.
On the Mac side of operations the site says:
“While a lot of the credit for Apple’s success is rightfully assigned to the iOS franchises, the OS X business has more than quadrupled in five years. This has happened without drastic price fluctuations. Neither holds for the overall PC industry which has seen both volume and sales decline while prices have eroded along with profitability. On top of that, growth has nearly evaporated.”
Apple has seen a great increase in the use of the Mac platform, yet it still only accounts for 20% of Apple’s total profits. However, the growth of iOS has been equally remarkable. iOS now accounts for 75% of Apple’s total profits. The combination of the two contributes over 95% of the bottom line profit for the Apple juggernaut. When you compare this to Microsoft’s numbers you’ll find that last quarter Microsoft made sales of $4.445 billion, but their operating cost was tallied at $2.764 billion.
So despite the fact that Windows earned twice as much as the Mac earned, OS X and iOS combined enabled 3.5 times the profit of Windows. With the success that Apple recently enjoyed in overtaking Microsoft in terms of overall profit this news of the profit generation isn’t shocking, but it is very interesting to see how Apple’s ability to remain agile is helping it to quickly outpace its old nemesis.