Apple relies more on iPhones as Tim Cook prepares new models

Tim Cook, chief executive officer of Apple Inc., stands for a photograph during the sales launch for the iPhone 6 and iPhone 6 Plus at the Apple Inc. store in Palo Alto, California, United States, on Friday, Sept 19, 2014.
Tim Cook, chief executive officer of Apple Inc., stands for a photograph during the sales launch for the iPhone 6 and iPhone 6 Plus at the Apple Inc. store in Palo Alto, California, United States, on Friday, Sept 19, 2014.PHOTO: BLOOMBERG

(Bloomberg Business) - For all the attention Apple has received this year for its new smartwatch and music service, or rumours about an updated TV device and building a car, the company is increasingly dependent on the iPhone.

Since the handset was introduced in 2007, the company has never collected as large a percentage of its revenue from one product as it's doing now-even as new products and services are introduced. The device's position at the center of Apple's orbit will be on display Sept 9 when Chief Executive Officer Tim Cook introduces new models at the Bill Graham Civic Auditorium in San Francisco.

The new devices are expected to have similar designs to the iPhone 6 and 6 Plus, with an improved camera, faster processor, and a new touch-screen interface so users can make a command by pressing hard on the screen.

Along with the iPhone, the company is expected to introduce at the event an update to Apple TV, the set-top box that will get a new remote and be able to play such applications as games from outside developers, according to people familiar with the plans. A new, bigger-screen iPad also is expected, another person said. Apple declined to comment. 

Even with the shared stage time, the iPhone shows no signs of losing its position as Apple's most lucrative product. If anything, its importance is increasing as sales of the iPad decline and while Apple Watch is still a young, if promising, niche product.

The revenue dominance raises the stakes for Cook to keep the company's marquee handset a top seller.

Apple's stock has slid in recent months in part on concerns about future growth, particularly about iPhone demand in China. The shares fell 1.8 per cent to $110.37 at the close Thursday in New York, and have declined 16 per cent since July 21, when the company reported iPhone shipments and issued a sales forecast that missed analysts' projections.

It's a dilemma any CEO would love to have: The iPhone generated $102 billion in sales in Apple's last fiscal year, more than Google, Facebook, and Twitter's annual revenue combined. 

To put in perspective how large the iPhone business has become, look at the car market Apple has been exploring whether to enter.

According to Benedict Evans, a research analyst and partner at venture capital firm Andreesen Horowitz, the premium car market, which includes Mercedes-Benz, BMW, Audi, and Lexus, generates about $220 billion in annual revenue. "For comparison," he wrote on Aug. 21, "iPhone revenue in the last 12 months was $146.6 billion."

Buzzfeed and TechCrunch previously reported details about the debut of the Apple TV, while 9to5Mac reported about the release of larger iPads.