The entirety of "wearable, home, and accessories" amounted to 10.9% of revenue for the past quarter, which included Christmas, and 9.4% for all of fiscal 2019. In addition to the Apple Watch, that category includes Airpods, HomePod, Apple TV, Beats, iPod touch...
Just because you like the Apple Watch doesn't mean that it has changed the way the company does business. And the fact that Apple doesn't break out gross margin for this category tells us that they aren't particularly proud of that number. Gross margin on products as a whole is about 34%.
Apple wants to paint the picture that they are diversifying away from phones, which accounted for over 3/5 of their revenue this past quarter, and shifting toward services and other products.
But it's one thing to repeat a rosy narrative, and another entirely to back it up with financial statements. Apple is still a phone company, and if the Apple Watch really drove profits for them, they'd break "wearables" out to its own line item, or at least show us the gross margin for "wearable, home, and accessories."
The entirety of "wearable, home, and accessories" amounted to 10.9% of revenue for the past quarter, which included Christmas, and 9.4% for all of fiscal 2019. In addition to the Apple Watch, that category includes Airpods, HomePod, Apple TV, Beats, iPod touch...
The Apple Watch by itself is estimated to be larger than the iPod was at its peak. (http://www.asymco.com/2019/12/12/ipods-pro/) and the Airpods if they are not already larger than the iPod at its peak soon will be.
As far as the iPod Touch, the entire iPod line was less than 1.5 million a quarter when they stopped breaking out the numbers (years before they stopped reporting volumes of their other lines).
But the last time I checked, even a category that is only 10% of Apple's revenue still puts that category's revenue above all but the top 100 companies in the US.
Just because you like the Apple Watch doesn't mean that it has changed the way the company does business. And the fact that Apple doesn't break out gross margin for this category tells us that they aren't particularly proud of that number. Gross margin on products as a whole is about 34%.
Apple wants to paint the picture that they are diversifying away from phones, which accounted for over 3/5 of their revenue this past quarter, and shifting toward services and other products.
But it's one thing to repeat a rosy narrative, and another entirely to back it up with financial statements. Apple is still a phone company, and if the Apple Watch really drove profits for them, they'd break "wearables" out to its own line item, or at least show us the gross margin for "wearable, home, and accessories."
https://s2.q4cdn.com/470004039/files/doc_financials/2020/q1/... https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/...