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
Visualizing Internet Usage by Global Region
In this infographic, we map out internet usage by global region based on the latest data from the World Bank.
Visualizing Internet Usage by Global Region
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.
Digital technologies have become an integral part of our daily lives, transforming communications, business, health, education, and more. Yet, billions of people around the world are still offline, and digital advancement has been uneven.
Here, we map internet usage by region based on data from the World Bank’s Digital Progress and Trends Report 2023.
Digitalization Has Been Uneven
According to the World Bank, between 2018 and 2022, the world gained 1.5 billion new internet users.
In 2020 alone, the share of the global population using the internet increased by 6% (500 million people), marking the highest jump in history. India, in particular, has seen high rates of adoption. For example, in 2018, only 20% of Indians used the internet. By 2022, this percentage had grown to more than 50%.
Region | Individuals using the internet (% of population) |
---|---|
East Asia & Pacific | 74 |
Europe & Central Asia | 87 |
Latin America & the Caribbean | 76 |
Middle East & North Africa | 77 |
North America | 92 |
South Asia | 42 |
Sub-Saharan Africa | 34 |
However, the progress of digitalization has been uneven both within and across countries.
In 2022, one-third of the global population remained offline, with parts of Asia and Africa still experiencing very low rates of internet usage. For instance, more than half of businesses in Burkina Faso, Ethiopia, Ghana, and Senegal reportedly lack internet connection.
According to the World Bank’s report, when fast internet becomes available, the probability of an individual being employed increases by up to 13%, and total employment per firm increases by up to 22%. Moreover, firm exports nearly quadruple with the availability of fast internet. Across Africa, 3G coverage has been associated with a reduction in extreme poverty, with reductions of 10% seen in Senegal and 4.3% in Nigeria.
Curious to learn more about the internet? Check out this animated chart that shows the most popular web browsers since 1994.
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