Apple Store AntaraSource: Apple

What you need to know

  • JP Morgan has suggested that 31% of Apple's revenue came from its Apple Stores and website this year.
  • The findings are based on analysis of Apple's 10-K filing.
  • It says Apple's retail strategy is driving more direct purchases from customers.

Analysis of Apple's 10-K filing for the end of its financial year suggests that 31% of Apple's revenue in 2019 came from its Apple Stores and its website. According to AppleInsider, the figure is up from 29% in 2018, and 28% the year before.

The report states:

Observations from JP Morgan of the 10-K filing seen by AppleInsider reveals Apple's retail strategy is "driving greater direct purchases from customers," with Apple Stores and its website accounting for 31% of total revenue for the financial year. This is an improvement from the 29% seen for the 2018 fiscal year and 28% in 2017.

It is suggested direct distribution revenue rose 5% year-on-year to $81 billion for the year, while indirect distribution revenue from other retailers and sales sources declined a similar percentage to $180 billion.

The greater sales from Apple's own outlets is likely to help drive AppleCare revenues, which in turn helps boost Apple's Services revenue in general.

On the back of Apple's strong fiscal performance this year, JP Morgan also noted an increase in share repurchases, Apple having bought 86 million shares in July, August, and September. A sustained growing share of revenue from its stores and website will be encouraging to Apple. It continues to invest heavily in its current stores, and in building new ones, Apple's Antara store (above) in Mexico City is one of its latest offerings.

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What's also interesting is that Apple reported $8.1 billion in deferred revenue for 2019. It anticipates 68% of that to be fulfilled in the next 12 months. JP Morgan believes this points to roughly $5.5 billion in Services revenue in 2020. The news comes in wake of further encouraging reports that Apple's iPad shipments have grown 4% year-on-year in the face of a shrinking tablet market.

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