Apple Gets the Credit (And the Cash) for Growth of Mobile Computing Revenue

What would the mobile computing industry (defined for this purpose as smartphones and tablets) be without Apple, had the company not entered it in June of 2007 with the iPhone?

Less lucrative, that’s what.

Charting the industry’s performance over the past five years, Morgan Keegan analyst Tavis McCourt figures its revenue in the fourth quarter of 2011 — $71.4 billion — is about twice what it was in the fourth quarter of 2007 — $37.9 billion.

But remove Apple from the picture, and that revenue declines — dramatically.

Turns out that without Apple, the mobile computing industry’s revenue in the fourth quarter of 2011 would be about what it was in the fourth quarter of 2007.

In Q4 2007, that was $37.93 billion. And in Q4 2011, it was $37.97 billion. In other words, non-Apple revenue in the mobile computing industry has been nearly stagnant for five years. Which is not to say that revenues wouldn’t have grown had Apple never entered the scene. Just that Cupertino has been doing a hell of a job commandeering a lot of their growth the past few years.

And that’s remarkable. Because overall, the industry’s revenue has increased over that time; it’s just that the bulk of that increase has gone to Apple. In the fourth quarter of 2011, for example, Apple generated $33.5 billion in mobile device revenue, which is about 47 percent of the $71.4 billion generated by the broader industry.

What seems to be happening, then, is that the bulk of the industry’s revenue growth is accruing to Apple, and because the company has the highest margins around, that’s where most of the profit is ending up, as well. Consider the earnings before interest and taxes chart, below.

“Apple is dominating the industry’s pool of profits,” says McCourt. “With about 11 percent of industry shipment volumes of smartphones and tablets, Apple generates about 47 percent of the industry’s revenues, and over 80 percent of its operating profits.”