Apple’s iOS (software and devices) is responsible for about 75 percent of Apple’s profits as of last quarter, while OS X is responsible for only about 20 percent, according to a new report from market intelligence firm Asymco. Combined, both platforms account for about 96 percent of Apple’s overall profit picture, where four years ago, Mac OS X (the only OS offered by Apple at the time) accounted for 50 percent of the company’s total profit.
Surprisingly, Apple’s Mac sales have quadrupled in the last five years, and without the bottoming out of prices that the PC business has experienced. So even though Apple’s Mac business is much stronger than it was before the introduction of the iPhone and iOS, it’s still gradually making up less and less of Apple’s overall business. That’s more of a testament to the success of iOS than any sign of weakness for OS X.
All told, Apple takes in $9.8 billion in profit from the sale of integrated hardware/software devices. How does that stack up to the Windows way of doing things, in which the software is licensed to independent hardware makers for use on their devices? According to Asymco, Microsoft took in around $2.7 billion from Windows and Windows Live last quarter. That’s about twice what Apple made on the Mac, but it’s only less than a third of what Apple made on iOS and OS X combined. Google employs a completely different model, licensing its Android OS for use on hardware for free, and counting on revenue from search and the Android market.
The report from Asymco shows what other companies are already trying to emulate Apple: controlling both hardware and software sides of the equation is a key ingredient to higher profitability. HP, another company with the sales volume necessary to use such a model, announced that its recently acquired webOS operating system would be appearing not only on its mobile hardware, but also on HP computers in 2012. It’s a risk, but if Apple’s example is any indication of potential success, it’s a risk worth taking.