Understand any stock in simple English
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Apple sells iPhones, computers, and digital services, and takes a cut from the apps and subscriptions people buy on its devices.
Apple sells the iPhone, the product that made it one of the most valuable companies on earth. But the iPhone is really a doorway: once you have one, Apple sells you more things to go with it, like a Mac or an Apple Watch, and charges for services that run on it, such as iCloud storage and Apple Music. The company also takes a commission when you buy apps or subscriptions through its App Store, and that cut is a big, high-margin part of the business.
People pay Apple a premium because the hardware and software are designed together, so the whole thing just works. That lock-in is the engine: once your photos, messages, and apps live inside Apple's world, switching to a rival phone becomes a hassle. Competitors like Samsung and Google sell capable phones, often cheaper, but they can't easily match that tight integration. Apple's real moat is habit and convenience, not any single feature. The iPhone still drives most of the money, but it's a mature product — people upgrade less often now that phones are good enough. Services have become the growth story, and they carry much fatter profit margins than hardware. Apple also spends heavily buying back its own stock; over the past decade it has repurchased a huge chunk of its shares, which shrinks the share count and lifts earnings per share. It pays a modest dividend too.
In 1976, Steve Jobs and Steve Wozniak, joined briefly by Ronald Wayne, started Apple to sell a personal computer they had built. The Apple I was a hobbyist's machine, but the idea was simple and big: put a computer in the hands of ordinary people.
Four years later, Apple sold shares to the public for the first time. The money and attention gave a young company the resources to grow, and it turned the founders' garage project into a real public business.
Growth brought conflict. Jobs left Apple's board after a dispute with CEO John Sculley, the man he had helped bring in to run the company. Apple would spend the next decade without the person most tied to its identity.
By the mid-1990s, Apple was drifting, and the way back ran through a company Jobs had started after leaving: NeXT Software. Apple bought it for about $400 million, a deal that brought Jobs back as an adviser and, just as importantly, gave Apple the foundation for the operating systems behind future Macs and iPhones.
Apple was struggling when it named Jobs interim CEO, replacing Gil Amelio. His return set the company on the path to its revival, though at the time it was far from clear how far that revival would go.
Apple opened its first retail stores in Virginia and California, giving people a place to touch its products rather than just read about them. The same year, Jobs unveiled the iPod digital music player, and Apple began moving beyond computers into the devices people carried every day.
Jobs unveiled the iPhone, a phone that was really a small computer in your pocket. It became Apple's single biggest business, eventually accounting for more than half of company revenue, and it changed what kind of company Apple was.
The App Store let users download software straight to their iPhones and iPads, and it made Apple a gatekeeper: the company usually took a 30% cut of sales. That fee turned the App Store into a large and growing money machine, and it tied Apple's fate to the software other people built.
Jobs died, and Tim Cook took over as CEO. Cook's tenure relied on canny stewardship of supply chains, pricing and a push into services, keeping the money flowing even as the iPhone matured.
Apple became the first publicly traded company valued at $1 trillion. It was a milestone that would have been hard to imagine back when two Steves were selling circuit boards.
John Ternus took over as chief executive, with Tim Cook moving to executive chairman. Ternus reshaped the executive team, including naming a new M&A chief, as Apple looked for new revenue sources beyond its existing hits.
Apple launched the iPhone Duo, its first foldable, and it sold out within minutes despite a $1,999 price tag. Shares hit an all-time high, and the broader lineup lifted average selling prices and pulled users deeper into Apple's services ecosystem.
There are real risks. Apple depends on China both as a giant market and as its main manufacturing base, so trade tensions and geopolitics are a genuine threat. Regulators in Europe and elsewhere are attacking its App Store fees and forcing it to open up to rival app stores and payment systems, which could dent that lucrative cut. And the company has struggled to launch a hit new product category — its mixed-reality headset is expensive and niche so far. Apple is a cash machine, but one whose biggest fights are now about defending a kingdom rather than conquering new ones.
Saved answer · last researched 20 Oct 2026