Technology
Chart: Here’s How 5 Tech Giants Make Their Billions
The Revenue Streams of the Five Largest Tech Companies
The Chart of the Week is a weekly Visual Capitalist feature on Fridays.
Last year, we published a chart showing that tech companies have displaced traditional blue chip companies like Exxon Mobil and Walmart as the most valuable companies in the world.
Here are the latest market valuations for those same five companies:
Rank | Company | Market Cap (Billions, as of May 11, 2017) | Primary Revenue Driver |
---|---|---|---|
#1 | Apple | $804 | Hardware |
#2 | Alphabet | $651 | Advertising |
#3 | Microsoft | $536 | Software |
#4 | Amazon | $455 | Online Retail |
#5 | $434 | Advertising | |
TOTAL | $2,880 |
Together, they are worth $2.9 trillion in market capitalization – and they combined in FY2016 for revenues of $555 billion with a $94 billion bottom line.
Bringing Home the Bacon?
Despite all being at the top of the stock market food chain, the companies are at very different stages.
In 2016, Apple experienced its first annual revenue decline since 2001, but the company brought home a profit equal to that of all other four companies combined.
On the other hand, Amazon is becoming a revenue machine with very little margin, while Facebook generates 5x more profit despite far smaller top line numbers.
Company | 2016 Revenue (Billions) | 2016 Net Income (Billions) | Margin |
---|---|---|---|
Apple | $216 | $46 | 21% |
Alphabet | $90 | $19 | 21% |
Microsoft | $85 | $17 | 20% |
Amazon | $136 | $2 | 2% |
$28 | $10 | 36% |
How They Make Their Billions
Each of these companies is pretty unique in how they generate revenue, though there is some overlap:
- Facebook and Alphabet each make the vast majority of their revenues from advertising (97% and 88%, respectively)
- Apple makes 63% of their revenue from the iPhone, and another 21% coming from the iPad and Mac lines
- Amazon makes 90% from its “Product” and “Media” categories, and 9% from AWS
- Microsoft is diverse: Office (28%), servers (22%), Xbox (11%), Windows (9%), ads (7%), Surface (5%), and other (18%)
Lastly, for fun, what if we added all these companies’ revenues together, and categorized them by source?
Category | 2016 Revenue (Millions) | % Total | Description |
---|---|---|---|
Hardware | $197,020 | 36% | iPhone, iPad, Mac, Xbox, Surface |
Online Retail | $122,205 | 22% | Amazon (Product and Media Categories) |
Advertising | $112,366 | 20% | Google, Facebook, YouTube, Bing ads |
Software | $31,692 | 6% | Office, Windows |
Cloud/Server | $31,396 | 6% | AWS, Microsoft Server, Azure |
Other | $60,177 | 11% | Consulting, other services (iTunes, Google Play), etc. |
$554,856 | 100% |
Note: this isn’t perfect. As an example, Amazon’s fast-growing advertising business gets lumped into their “Other” category.
Hardware, e-commerce, and and advertising make up 76% of all revenues.
Meanwhile, software isn’t the cash cow it used to be, but it does help serve as a means to an end for some companies. For example, Android doesn’t generate any revenue directly, but it does allow more users to buy apps in the Play Store and to search Google via their mobile devices. Likewise, Apple bundles in operating systems with each hardware purchase.
Technology
Charted: The Jobs Most Impacted by AI
We visualized the results of an analysis by the World Economic Forum, which uncovered the jobs most impacted by AI.
Charted: The Jobs Most Impacted by AI
This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.
Large language models (LLMs) and other generative AI tools haven’t been around for very long, but they’re expected to have far-reaching impacts on the way people do their jobs. With this in mind, researchers have already begun studying the potential impacts of this transformative technology.
In this graphic, we’ve visualized the results of a World Economic Forum report, which estimated how different job departments will be exposed to AI disruption.
Data and Methodology
To identify the job departments most impacted by AI, researchers assessed over 19,000 occupational tasks (e.g. reading documents) to determine if they relied on language. If a task was deemed language-based, it was then determined how much human involvement was needed to complete that task.
With this analysis, researchers were then able to estimate how AI would impact different occupational groups.
Department | Large impact (%) | Small impact (%) | No impact (%) |
---|---|---|---|
IT | 73 | 26 | 1 |
Finance | 70 | 21 | 9 |
Customer Sales | 67 | 16 | 17 |
Operations | 65 | 18 | 17 |
HR | 57 | 41 | 2 |
Marketing | 56 | 41 | 3 |
Legal | 46 | 50 | 4 |
Supply Chain | 43 | 18 | 39 |
In our graphic, large impact refers to tasks that will be fully automated or significantly altered by AI technologies. Small impact refers to tasks that have a lesser potential for disruption.
Where AI will make the biggest impact
Jobs in information technology (IT) and finance have the highest share of tasks expected to be largely impacted by AI.
Within IT, tasks that are expected to be automated include software quality assurance and customer support. On the finance side, researchers believe that AI could be significantly useful for bookkeeping, accounting, and auditing.
Still interested in AI? Check out this graphic which ranked the most commonly used AI tools in 2023.
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