Apple’s historical record of growing sales is amazing. It recently became the first company to reach a market capitalization of $2 trillion. While market capitalization doesn’t tell how profitable Apple is, it does help us to understand why Apple makes the amount of money it does. Apple’s hardware business can take advantage of scale to drive down costs. Apple’s service businesses (Apple+, Apple Music, App Store) will add significant profit for Apple in the years ahead. The service side of the business doesn’t require the same fixed costs as the hardware side, which makes it more profitable.
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