Sales 2023: US$85.2 billion (€78.794 billion)

Overview

Apple, part of the five major technology companies (Alphabet, Meta, Apple, Amazon, and Microsoft), has revolutionized entire entertainment industries since 2000, first with the iPod, then with the iPhone, the iPad, and the launch of the iTunes Store. Today, management realizes that its rapid hardware growth is coming to an end. Now the company wants to profit more from the two billion users of Apple devices (as of early 2023). In September 2019, Apple launched the "Arcade" gaming subscription service. Apple TV+, another subscription offering with series and films produced in-house, followed at the end of 2019.

The sales figures in the IfM ranking refer to the figures given in Apple’s 2023 annual report for services.

General Information

Headquarters
One Apple Park Way
Cupertino, CA 95014
USA
Telephone: 001 408 9961010
Internet: investor.apple.com
 
Branches of trade: Film production, subscription and streaming services (music, film), license sales
Legal form: Stock Company
Financial year: 01.10. – 30.09.
Founding year: 1976

Basic economic data (in US$ million)

	2023	2022	2021	2020	2019
total sales	383.285	394.328	365.817	274.515	260.174
Sales “Services”	85.200	78.129	68.425	53.768	46.291
Profit	96.995	99.803	94.680	57.411	55.256
Share price (in $, September 30)	171,21	138,20	141,50	115,81	55,99
Employees	161.000	164.000	154.000	147.000	137.000

Executives and Directors

Management:

• Tim Cook, Chief Executive Officer
• Katherine Adams, Senior Vice President and General Counsel
• Eddy Cue, Senior Vice President, Services
• Craig Federighi, Senior Vice President, Software Engineering
• John Giannandrea, Senior Vice President, Machine Learning and AI Strategy
• Greg Joswiak, Senior Vice President, Worldwide Marketing
• Sabih Khan, Senior Vice President, Operations
• Luca Maestri, Senior Vice President and Chief Financial Officer
• Deirdre O'Brien, Senior Vice President, Retail and People
• Johny Srouji, Senior Vice President, Hardware Technologies
• John Ternus, senior vice president, hardware engineering
• Jeff Williams, Chief Operating Officer
  

Board of Directors:

• Arthur D. Levinson, Former Chairman and CEO, Genentech
• James A. Bell, Former CFO and Corporate President, The Boeing Company
• Tim Cook, CEO, Apple
• Al Gore, Former Vice President of the United States
• Andrea Jung, President and CEO, Grameen America
• Monica Lozano, President and CEO, College Futures Foundation
• Ronald D. Sugar, Former Chairman and CEO, Northrop Grumman Corporation
• Susan L. Wagner, Co-founder and Director, BlackRock

History

Steven Paul Jobs and Stephen Gary "Woz" Wozniak met in the early 1970s. Jobs had heard about the "Cream Soda" computer, which Wozniak had built himself. During school holidays, both worked at Hewlett-Packard, where they got to know each other better. Their first joint project was the construction of "Blue Boxes," which allowed people to make free long-distance calls by simulating the corresponding tones of the telephone company. This was the first evidence of the division of labor that made the Jobs/Wozniak team so successful: Wozniak, with his technical expertise, was responsible for manufacturing the devices, while Jobs organized the materials and managed sales. The two young entrepreneurs earned $90 for each Blue Box sold.

Jobs and Wozniak were part of the first generation of the Homebrew Computer Club in 1975. There, Computer geeks present their projects to like-minded people and exchange their expertise. There, Stephen Wozniak presented a homemade computer equipped with a keyboard that could be connected to a television. Jobs was enthusiastic about the prototype and convinced Wozniak to found his own company to mass-produce the computer.

Apple Computer, the name of the company, was founded (at least according to myth) on April 1, 1976, in the garage of Jobs's parents' house in Los Altos, near San Francisco. Jobs later stated that he chose the name "Apple" in part to appear before Atari in the phone book. Along with Jobs and Wozniak, Ronald Wayne was one of the company's founders. The graphic designer was a friend of Steve Jobs, who gave Wayne, who also designed the first Apple logo, a ten percent stake in the company. This would enable him to exercise veto power over Wozniak, who, like Jobs, held 45 percent.

The first product was the wooden computer developed by Wozniak, which was dubbed the "Apple I." Around 50,000 units of the successor model, the Apple II, were sold between 1977 and 1980. While Apple employed around 50 people in 1977, by 1979 this number had grown to over 1,000. Steve Jobs's childhood home had long since outgrown the company's size, so at the end of 1977, the workforce moved into the new company headquarters in Cupertino, California. In 1980, Apple took the plunge and became the first Silicon Valley startup to have its stock traded on Wall Street. Steve Jobs and many of his employees became multimillionaires overnight.

The competitive landscape in the computer market had changed dramatically between the mid-1970s and the early 1980s. By then, companies like Commodore, Atari, and IBM were offering similar, and in some cases more powerful, computers. A particular challenge for Apple was that IBM introduced the "IBM PC" in 1981, just as the third generation of Apple computers had flopped. The IBM PC was designed purely as a business PC, featuring the user-friendly DOS operating system developed by Microsoft, and thus fulfilled all the requirements for use in large companies and government agencies. Apple's initial reaction was to take out a full-page ad in the Wall Street Journal, commenting on IBM's entry into the personal computer market with the somewhat arrogant headline "Welcome IBM. Seriously."

At the time, Apple was unable to offer a comparable product. The Apple II continued to deliver strong sales, but only among tech-savvy home users. To compete with IBM, a worthy successor to the Apple II was launched in 1982 (after the flop of the Apple III). Then came Apple Lisa (named either after the abbreviation for "Local Integrated Software Architecture" or after Steve Jobs' daughter). Lisa was intended to give users a new computing experience. Its most important component was to be a mouse-based, graphical operating system, the likes of which had previously only been integrated by computer manufacturer PARC into its "Xerox Alto" model. To gain the technical expertise to implement such a "Graphical User Interface" (GUI), Steve Jobs sought information from Xerox and offered PARC managers options on Apple stock. Several programmers also switched completely from PARC to Apple to support the Lisa development team.

Apple's then-CEO, Michael Scott, was skeptical of Steve Jobs' involvement in the Lisa project. Jobs had already been responsible for the failed Apple III model, which had cost the company several million dollars. Scott was not prepared to give Jobs complete freedom in developing a new computer a second time. He pulled him out of the Lisa department and made him press spokesman. But after a brief interlude as head of the PR department, Jobs became interested in an Apple project that had previously led a shadowy existence with only four programmers in charge. Since 1979, the small team, led by Jef Raskin, worked on the computer named after Raskin's favorite apple variety, the "McIntosh." The computer was intended to feature high-quality graphics capabilities and, at a price of $500, still be affordable for everyone. Annoyed at being banished from the Lisa project, Steve Jobs seized leadership of the Macintosh team, which he had, ironically, repeatedly wanted to disband in the years prior. Jef Raskin, the true father of the Macintosh, was transferred to another department by Jobs and left Apple shortly thereafter. The name "Bicycle," which the project was then to be given, failed to catch on.

The working atmosphere at Apple suffered from the rivalry, partly triggered by Jobs, between the Lisa team and the Macintosh engineers, who had allegedly copied parts of Lisa. The Apple II division, which still produced the company's most profitable product, also felt disadvantaged. When Steve Jobs brought Stephen Wozniak into the Macintosh division, the Apple II team lost its most important employee. The negative atmosphere also had personnel consequences. CEO Scott had to leave. He had failed to maintain peace within the company. In 1981, at Steve Jobs's urging, John Sculley was hired as the new CEO. Sculley, who came from the beverage giant PepsiCo, had built Pepsi into a beverage brand in the 1970s that could compete with market leader Coca-Cola. Steve Jobs's question, with which he convinced Sculley to join Apple, became legendary in this context: "Do you want to spend the rest of your life selling sugar water, or do you want to change the world?"

After the Lisa computer was a flop, CEO Sculley had no choice but to rely on the Macintosh team led by Steve Jobs. The two initially got along well, and the press and employees called them a "dynamic duo." They shared a passion for unusual advertising campaigns and commissioned the Chiat/Day agency to market the launch of the Macintosh in 1984. The agency hired director Ridley Scott to shoot a commercial that aired only once during Super Bowl halftime and was set in a future inspired by Orwell's "1984." A woman smashed the "Big Brother" screen with a hammer, then the now-legendary slogan flashed: "On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like '1984'."

Initially, the Macintosh sold well, but significantly below expectations. Apple's management and board blamed Jobs for this. He had so frayed the nerves of decision-makers, the board, and employees that he had become persona non grata in the company he himself had founded ten years earlier.

After Jobs's dismissal, Apple's fortunes went uphill. The main reason for this was the development of the technically improved Macintosh II, which sold twelve and a half million units by 1993. The Apple II also remained relatively successful until the year it was discontinued, selling a total of five million units. The Sculley era was also marked by one of the biggest copyright disputes in American business history, in which Microsoft and Apple accused each other of stealing the idea for graphical operating systems. In the mid-1990s, after Sculley and three other CEOs had tried in vain to get Apple back on track, Steve Jobs returned. Apple desperately needed a new operating system, and Jobs's company, NeXT, which he had founded in the meantime, had just developed one. NeXT was acquired by Apple, and Jobs became CEO again.

The iMac was an initial success, selling well thanks in part to the "Think Different" advertising campaign. But by 2001, the entire computer industry was in crisis, which also hit Apple hard, at a time when the market for internet-enabled home computers was saturated. Flops like the Power Mac G4 Cube exacerbated the crisis. Some computer manufacturers were already talking about the end of the PC. But Jobs countered the pessimists by saying that home computers would have to fulfill other purposes in the future. The magic word that Jobs coined in numerous presentations was "digital lifestyle." Apple computers would in future be compatible with and interact with consumer electronics. To this end, Apple developed the video software iMovie and the program iTunes (now simply called "Musik" in German-speaking countries), which can be used to categorize and burn MP3s on your computer.

The most important product Apple launched as part of its digital lifestyle offensive was the iPod in 2001. With its five gigabyte hard drive, the music player boasted more storage space than any MP3 device before it. Jonathan Ive's design, combining white plastic and chrome, made the iPod a prestige item. A clever advertising campaign created a hype the likes of which had probably only been seen before with the launch of the Sony Walkman in the late 1970s. From 2001 to 2008, Apple sold more than 170 million iPods. A key component of the iPod phenomenon is the iTunes Store, the virtual music store where music could be legally downloaded for a fee. Apple thus became a pioneer in online music distribution. 

Jobs then considered a device that would combine the functions of an iPod with those of a BlackBerry and a mobile phone. He was able to draw on experience gained with the Newton PDA since the late 1980s. In 2004, Apple set up a 1,000-person working group for the highly confidential "Project Purple." Over a period of 30 months and at an estimated development cost of $150 million, the iPhone was developed. With the "i" standing for "internet, individual, instruct, inform, inspire." Then, on January 9, 2007, the iPhone was unveiled at Macworld in San Francisco. In a Facebook comment, someone wrote: "People who were there didn't realize this was a historic moment." The iPhone was launched and quickly became the biggest success in the company's history. Sales increased sixteenfold between 2005 and 2015, and by November 2018, 2.2 billion iPhones had been sold.

Apple was subsequently unable to come up with a similarly revolutionary, disruptive product. With the iPhone and other smartphones, for example, the entire advertising industry had to reorient itself, moving away from traditional advertising platforms like television and toward online advertising. Google and Facebook were the big winners. The iPad, the tablet computer with a touchscreen, launched in 2010, and the Apple Watch launched in 2015, along with their respective successors, were certainly successful (with 18 million Apple Watches sold in 2017, they surpassed the entire Swiss watch industry). They were unable to replicate the overwhelming success of the iPhone.

Steve Jobs was diagnosed with a rare form of pancreatic cancer in October 2003. On October 5, 2011, he died from the disease surrounded by his family in Palo Alto, California.

management

After Steve Jobs' death in October 2011, the roles were clear. Jobs was Apple. He was the visionary who iGodTim Cook, 50 years old at the time, CEO since August 2011, and previously COO responsible for day-to-day operations, faced a great deal of skepticism. Shortly after Jobs' death, the Huffington Post ran an article titled "Why Apple is doomed." Cook, the son of a shipyard worker from Alabama, had studied mechanical engineering, earned a Master of Business Administration, and worked for IBM in North American sales and intelligent electronics. Steve Jobs personally brought him to Apple in 1998. Could the down-to-earth Cook, with his quieter leadership style and definitely no "technology prophet," succeed the towering figure of the charismatic Steve Jobs?

Today, Cook's position is undisputed. A look at Apple stock speaks for itself. While the price was around $56 in mid-2013, it rose to $155 by mid-April 2022. By mid-2019, 1.4 billion people owned an Apple device and 900 million owned an iPhone—most of which were sold during the Cook era. In August 2018, Apple became the first company ever to reach a market value of one trillion dollars. Today, it's almost three trillion, making Apple the most valuable company in the world. "To counter all the criticism, one must say that with him, Apple's success story simply continues," says Colin Crawford of Macworld.

Business segments

Apple designs, manufactures, and markets smartphones, PCs, tablets, wearables, and accessories, and sells related services. Specifically, these include products such as the iPhone, Mac computers, iPad tablets, the Apple Watch, and more (AirPods, Beats headphones, iPod touch).

For the classification of Apple in the media group ranking, only the sales of the “Services” division are taken into account: Sales of the digital Content businesses, streaming services, AppleCare, licensing, and other services. Sales from the various app stores, revenue from subscription services such as Apple Music (72 million subscribers as of June 2020) and Apple Arcade, and from the iCloud business.

And, of course, revenue from Apple TV+, the company's own video-on-demand service, available since November 1, 2019, which was originally intended to feature only original productions. According to a Bloomberg report from May 19, 2020, Apple has now also begun acquiring older films. At the end of 2020, Apple TV+ reported over 40 million subscribers.

Current developments

The era that shaped the US Big Tech companies "economically and in terms of innovation," when Apple, Google, Microsoft, Amazon, and Facebook were stock market stars, could be coming to an end, as Die Zeit wrote on December 11, 2022: "At the beginning of 2022, the shares of Apple, Microsoft, Alphabet, Amazon, and Meta went into an unexpected downward spiral after these companies had delighted investors with exorbitant price gains for a decade. But the stock market year is ending for them, just as it is for the overwhelming rest of the tech industry, in a veritable crash." Apple has declined 21 percent since January, Alphabet by 33 percent, Microsoft by 27 percent, Amazon by 48 percent, and Facebook's parent company, Meta, has even plummeted 66 percent. These were share price losses that were hardly imaginable. "The Big Tech boom is over, and Wall Street knows it," the industry media outlet Re/code described the crash.

Apple as a whole was the world's most valuable company by market capitalization in 2021. According to EY/Refinitiv, its market capitalization was just under three trillion dollars, ahead of Microsoft (2.57 trillion), Alphabet (1.6 trillion), and Saudi Aramco (1.88 trillion). The iPhone's huge sales successes are over. American tech expert Tien Tzuo also proclaimed "the end of ownership," and that the subscription era is now upon us. Apple, for example, has long since ceased to be a product company. The company's strategy is no longer based solely on selling iPhones, but on services. See existing subscription services such as Apple Music, Apple News+ (newspaper subscription), Apple Arcade (video games), and, of course, the video streaming service Apple TV+, which launched with great fanfare on November 1, 2019. And at least in the US, you can even order iPhones on a subscription basis instead of buying them.

So while Apple is undergoing fundamental changes, its Macs, iPhones, and so on are still seen as different, more elegant, more aesthetic, more sustainable, better (and more expensive), and cool. Even, as one read in the Swiss Handelszeitung, when Apple is the second most sought-after gift brand for wealthy Chinese women – after Bulgari and ahead of Chanel. Keynotes at Apple events were, and still are today, like sermons to cheering disciples. This fits in with the MacBooks that, it seems, are in every Hollywood movie and every Netflix series. This fits in with the news of Tim Cook's rise "to become the most influential US manager" (SZ, October 10, 2019).

Speaking of Tim Cook, various publications report that the CEO is already busy planning his succession. Although Cook, born in 1960—an advanced age by Apple standards—hasn't yet expressed any concrete intentions to step down, many observers consider current COO Jeff Williams (born in 1963) the logical successor to Apple's top position. The two other top candidates are Craig Federighi (born 1969), Senior Vice President of Software Engineering, and Chief Marketing Officer Greg "Joz" Joswiak (born 1964). Whoever it turns out to be, Cook's successor will definitely be responsible for the next big thing, likely the next huge thing, the iCar.

literature

• Leander Kahney: Tim Cook – The Genius Who Took Apple to the Next Level. Penguin Publishing Group 2019
• Erdmann, Charlotte (2011): One more thing: Apple's success story from the Apple I to the iPad. Munich: Addison-Wesley
• Isaacson, Walter (2011): Steve Jobs: The Authorized Biography of the Apple Founder. C. Bertelsmann Publishing
• Kahney, Leander (2013): Jony Ive: The Genius Behind Apple's Greatest Products. New York: Penguin
• Kahney, Leander (2008): Inside Steve's Brain, New York: Portfolio
• Young, Jeffrey S./Simon, William L. (2006): iCon Steve Jobs: The Greatest Second Act in the History of Business, New Jersey: Wiley
• Wozniak, Steve/Smith, Gina (2007): iWoz: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: WW Norton