iPod takes on a dimished role in Apple’s earnings – And that’s a good thing

Mon, Oct 27, 2008

Analysis, Finance, News

Andy Zaky over at Bullish Cross has an interesting article discussing the decreased role of the iPod in Apple’s earnings.  Zaky notes that the iPod only accounted for 14.2% of Apple’s revenue this past quarter.

There are two things at work here:

One, it was inevitable that iPod sales would eventually taper off as the market became saturated with MP3 players.  So while Apple is doing its best to introduce new iPod models, it’s was never realistic to expect that the iPod would maintain its astronomical growth indefinitely.

Second, as Mac sales continue to grow at an impressive rate, and as iPhone sales continue to skyrocket, it only makes sense that the iPod would have a diminished role in Apple’s earnings. Apple’s earnings have increased by more than 50% in just the last two years, and most of that can be attributed to non-iPod related sales.  If anything, the diminished role of the iPod in Apple’s earnings is a good thing.  It’s indicative of the fact that Apple isn’t relying on its past successes, and though iPod sales continue to impress, Apple is a forward looking company that continues to innovate with new products.

Read the fully story over here.


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