Apple's financial profile is highly sustainable, supported by: (1) world-class brand creating premium pricing power, (2) Services ecosystem generating high-margin recurring revenue with 1B+ paid subscribers, (3) massive scale economies in hardware production, and (4) dominant 20% global smartphone market share with highest customer loyalty in the industry.
Daily stock prices overlaid with quarterly TTM Adjusted Operating Profit since January 2021
● Stock Price (right axis) | ● TTM Adj OP in $mil (left axis)
| Mar24 | Jun24 | Sep24 | Dec24 | Mar25 | Jun25 | Sep25 | Dec25 | |
|---|---|---|---|---|---|---|---|---|
| Stock Price | $171 | $210 | $232 | $250 | $222 | $205 | $255 | $272 |
| Stock QoQ | -11% | +23% | +11% | +8% | -11% | -8% | +24% | +7% |
| Revenue YoY | -4% | +5% | +6% | +4% | +5% | +10% | +8% | +16% |
| Op Margin | 31% | 30% | 31% | 34% | 31% | 30% | 32% | 35% |
| SUM (Rule of 40) | 26% | 34% | 37% | 38% | 36% | 40% | 40% | 51% |
| TTM Op Profit ($B) | $129.4 | $132.0 | $134.9 | $137.7 | $139.6 | $142.8 | $145.9 | $154.2 |
| TTM OP QoQ | 0% | +2% | +2% | +2% | +1% | +2% | +2% | +6% |
| TTM FCF/OP | 79% | 79% | 81% | 71% | 71% | 67% | 68% | N/A |
| Debt/EBITDA | 0.8 | 0.8 | 0.9 | 0.7 | 0.7 | 0.7 | 0.7 | N/A |
FYE September (Apple's fiscal year ends in September)
Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, Mac, iPad, and wearables, and operates various platforms including iOS, macOS, and watchOS. Its Services segment provides advertising, AppleCare, cloud, digital content, and payment services.
| Segment | Rev | % Mix | YoY | Products | Competitors |
|---|---|---|---|---|---|
| iPhone | $209,590 | 50% | +4% | iPhone 17, iPhone 17 Pro, iPhone SE | Samsung, Huawei, Xiaomi, Google |
| Services | $109,000 | 26% | +14% | App Store, Apple Music, iCloud, Apple TV+, Apple Pay | Google, Amazon, Spotify, Netflix |
| Wearables | $39,850 | 10% | -4% | Apple Watch, AirPods, Vision Pro | Samsung, Fitbit (Google), Garmin |
| Mac | $33,710 | 8% | +12% | MacBook Air, MacBook Pro, iMac, Mac Studio | Microsoft/OEMs, HP, Dell, Lenovo |
| iPad | $28,020 | 7% | +5% | iPad Pro, iPad Air, iPad mini | Samsung, Microsoft Surface, Amazon |
Apple operates across multiple large TAMs: global smartphone market (~$579B), digital services (~$500B+), wearables (~$70B), and personal computers (~$200B). The combined TAM exceeds $1.3 trillion.
Global smartphone TAM growing at 1.5% CAGR (2024-2029), while Apple is growing faster at 6-10% due to market share gains and premium ASP increases. Services TAM growing double-digits, aligned with Apple's 14% Services growth. Apple is outperforming TAM growth through share gains and ecosystem monetization.
The consumer electronics industry is moderately attractive. High barriers to entry and low buyer power favor incumbents, but intense competitive rivalry (Samsung, Google, Chinese OEMs) and ongoing substitution threats require continuous innovation. Apple's premium positioning insulates it from commodity competition.
| Customers | Distribution | Production | Suppliers | |
|---|---|---|---|---|
| Switching Costs | ✓ | - | - | - |
| Network Economies | ✓ | - | - | - |
| Branding | ✓ | ✓ | - | - |
| Scale Economies | - | ✓ | ✓ | ✓ |
| Process Power | - | - | ✓ | - |
| Cornered Resources | - | - | ✓ | - |
| Counter Positioning | ✓ | - | - | - |
Apple's primary moats are: (1) Branding - world's most valuable brand enabling premium pricing; (2) Switching Costs - ecosystem lock-in through iCloud, iMessage, App purchases; (3) Scale Economies - 250M+ iPhones annually drive massive purchasing leverage and R&D amortization.
Revenue acceleration from -4% to +16% is sustainable because: (1) iPhone upgrade cycle supported by Apple Intelligence AI features, (2) Services growing 14% annually with recurring subscription model, (3) emerging market expansion (India). Branding power and switching costs protect against competitive erosion.
35% operating margin is sustainable and could expand further due to: (1) Services mix shift (70%+ gross margin vs. 35% hardware), (2) Apple Silicon reducing Intel/Qualcomm royalties, (3) scale economies on R&D. Industry structure (low buyer power, brand premium) protects margins.
67-81% cash conversion ratio reflects capital-light model with minimal CapEx needs relative to profits. Manufacturing outsourced to Foxconn; Apple captures high-margin design/software value. Cash generation supports $100B+ annual shareholder returns.
0.7x leverage is extremely conservative for a company with Apple's cash generation. Net cash positive balance sheet. Debt used strategically for tax-efficient capital returns, not operational necessity. No refinancing risk.
Apple represents a high-quality compounder with best-in-class moats (brand, ecosystem, scale) and improving fundamentals (revenue acceleration, margin expansion). At 31x forward P/E, the stock prices in continued execution but offers modest upside if Services monetization or AI features exceed expectations. Key monitoring points: China market share, App Store regulatory outcomes, and AI feature adoption rates.