How Important is iPhone to Apple's Business? And Who Thinks it Stinks?

apple revenue

How important is the iPhone to Apple's business going forward? See the chart above, prepared by Fortune. Up from 5.7% in 2008 to 18.5% in 2009.

We're going to say "very" and "increasingly". Daring Fireball highlights how Apple goes about ensuring that "increasingly" part, riffing off The Loop's reminder of when Apple killed the iPod mini at the hight of its popularity and replaced it with the iPod nano:

You know who thinks the iPhone 3GS stinks? Steve Jobs. No one is working harder on an “iPhone 3GS killer” than Apple.

Given that competition is ramping up (see Android Central's coverage of Droid Day, CrackBerry's BlackBerry Storm2 watch, and Nokia Experts' massive N900 guide), is that internal drive still enough?

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

How Important is iPhone to Apple's Business? And Who Thinks it Stinks?


Well no doubt the only major competitor to the 3GS is the 2010 iPhone!
I'd argue Android is no closer then they were 6 months ago. While a few devices are starting to come out, the user experiences being reported - are awful!!!

The iPhone will continue to grow, iPod shrink and Mac stay the same. I'm surprised iTunes isn't growing some with app sales. Also I would think owning an iPhone would make you a little more likely to buy things through iTunes? Apple could help iTunes numbers a bunch I would think if they made cracked apps harder to get.

iPhone is incredibly important because it is a gateway drug to other apple products, especially the mac. How many people got iPhones fir the coolness, and then had an uncontrollable urge to get a mac?

Annnnd in this corner Palm Pre! Well UI easier than Android to maneuver around. And I've had a Window Mobile phone for a moment. Now that's saying something.

Yep that's why the 3gs is only a little better than the 3g for when you jailbreak it u can get all the missing features showing that iPhone 3g is capable of video recording

Mr hockey I agree
I bought the iPhone 3g and then bought a MacBook love them both. I don't see myself switching phone for something else untill iPhone 2010. Droid are ok but think about how long it has taken for the iPhone to get were it's at. Droid is gonna take at least the same time or more to get the kinks worked out, and by then iPhone will be 5 steps ahead.

Got first gen iPhone now updated to 3GS, love them. Wife now with 3GS, daughter with 3G. Now Looking at getting 13" Macbook Pro to replace Windows laptop

good thinking on the MacBook you will love it. I was skeptical at first but glad I made the switch

iPhone storage capacities are one thing holding back iTunes sales. My 16GB iPhone is nearly full with music alone and I'm only 15 months into my 24-month contract (It's actually been full for six months). I have no room to purchase more music, much less take more photos or buy movies and TV shows. Apple needs to sell 64GB and 128GB iPhones models, not just the anemic 8GB, 16GB and 32GB models now offered. I'm a pro photographer, and I can barely load a slide show portfolio onto my iPhone — I have to throw away files to load the multiple portfolios needed to actually use the phone for my business.

I seriously doubt you filled your 16gig in the iTunes store.
You would fill any size device with your porN^h^h^h slide show portfolios so I hardly think capacity is holding the iPhone back.
After all, you already bought one, didn't you?

I'm a little confused as to what the story is about, other than a vehicle to publish an interesting chart.
The chart is in percentages. Which makes it mildly interesting, but hardly definitive of Apple's business.
Mac sales are booming. Yet the chart shows them in decline. The Fallacy of the Percent.
When the total pie is growing as fast as Apple's business is growing, the relative size of any given slice means nothing. That 37% of net sales in 2009 is MUCH larger in terms of dollars than the 44% in 2008.
The business model is shifting. But that is EXACTLY Apples's strength. Its EXACTLY the business model they strive for.
I just don't see a story here.

I had the 1st iPhone as a hand down from my dad when he got the 3G. When 3G S came out I upgraded. After using my 3GS I switch from PC to Mac.
I love my iPhone and my Macbook. The only phone that can make me give up my iPhone is another iPhone.
All these other phones compair themselves to the iPhone. That in it's self tells the story.