Apple’s Revenue History

General | August 24, 2011 | 2 min read

Apple’s revenue now is at a run rate of over $100 billion dollars, a good deal higher than that of Microsoft. Apple’s profits also well exceed Microsoft’s profits. Yet, Apple has only about 50% of the headcount of Microsoft. These things were utterly unthinkable just 5 years ago. One way to visualize this is to imagine Yahoo overtaking Google in the search market and in terms of overall revenue & profits (Google does about 6 times the revenue of Yahoo), and multiply that difficulty by 10-fold, because Yahoo actually still makes money, but Apple was losing a lot of money when Steve Jobs came back in 1996.

I assumed that Apple grew steadily from when Jobs came back. I was wrong. Here is the revenue trajectory of Apple all the way going back to 1981. Focus on the years after 1997.

http://en.wikipedia.org/wiki/History_of_Apple_Inc.#Financial_history

Notice the crisis in 96-97-98 when he came back – that was a stomach churning drop in revenue, which explains why he came back. But notice that 5 years after he came back, in 2002, Apple still had less revenue than in 1997 (in fact, it was less than they had as far back as1989!). During those 5 years between 1997-2002, revenue first went up, and then went down again during the recession in 2001-2. Even worse, Apple was again losing money in 2001, a full 4 years after he came back. Why is that relevant? Any normal person would have found it very hard to keep the spirit and motivation up at that time. Apple’s greatest years were ahead of them, but only one person would have possibly believed it – Steve Jobs. No one else, in 2002, would have believed Apple’s best days were ahead. From only 2005, did Apple really achieve that big burst of growth, and within just 6 years Apple has overtaken Microsoft.

Also notice the extreme variation in growth. Even after the iPod arrived, Apple’s growth rates has dipped as low as 14% and has gone as high as 68% (until 2011, when it scaled new highs). In the 2009 bust, Apple dipped to only 14% year-over-year growth. Yet, in 2011, driven by the boom in iPad, Apple is exceeding 80% growth without meaningfully adding any headcount. This is the track record Jobs has piled up. I don’t know it will ever be equalled in this industry again.