How Apple, Microsoft and Amazon make their billions
It’s hard to imagine a life without these tech giants but how exactly do they make their huge profits? We investigate below.
Apple is just a part of our lives like anything else these days. From waking up in the morning and checking your messages on your iPhone to working off your Macbook, this tech giant surely makes the vast amount of its profits from products, right? Well, not quite. While it certainly makes the most amount of money from products, coming in a close second is what’s called ‘Services.’ According to a recent Apple report, this comprises of “revenue from Digital Content and Services, Applecare, Apple Pay, licensing, Apple Music, iCould and other services.” This year, for Q7, Services made $8.5 billion, while products made just $8.5 billion.
From controlling our lights and music through Alexa to being a favourite on our bookmarks tab, it is easy to assume that Amazon makes the vast amount of its profits through the products that it sells. Well, that’s not quite right, with their Amazon Web Services (AWS) providing the bulk of company profits. AWS provides networking, databases, analytics, storage and developer services and last year, brought in $3.2 billion in profits. Interestingly the e-commerce side of Amazon was second to that with $2.3 billion in North America and a loss of $1.2 billion outside the US last year.
The Bill Gates founded company splits itself into three categories, with the most profitable being “Productivity and Business Processes” which encompasses Microsoft Office, LinkedIn and Dynamics. Reports suggest that from 2016 to 2017, this department made $15.9 billion in profits.