Markets
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.
Markets
Graphene: An Investor’s Guide to the Emerging Market
The market value of graphene could reach $3.75 billion by 2030. As the emerging industry shows fast growth, it also faces obstacles.
Graphene: An Investor’s Guide to the Emerging Market
Graphene is an atomic-scale “honeycomb” that is revolutionizing the world of materials and capturing investor attention.
Experts predict that its market value could reach the billion-dollar threshold by 2027 and soar to a staggering $3.75 billion by 2030.
In this infographic sponsored by HydroGraph, we dive into everything investors need to know about this exciting industry and where it’s headed.
Promising Properties
Graphene possesses several unique physical properties which contribute to its wide range of potential applications.
- 200 times stronger than steel
- Harder than diamonds
- 1,000 times lighter than paper
- 98% transparent
- Higher electrical conductivity than copper
- Heat conductivity: 5 times that of copper
- 2,630 m² of surface area per gram
Since its first successful isolation in 2004, graphene’s properties have opened the doors to a multitude of commercial applications and products.
Applications of Graphene
Graphene has permeated numerous sectors like electronics, energy, and healthcare because of its impressive array of end uses.
| Industry | Revenue CAGR of Graphene Across Industries, 2022-2027 |
|---|---|
| Biomedical and Healthcare | 52% |
| Electronics and Telecommunications | 34% |
| Energy | 25% |
| Aerospace and Defense | 16% |
| Other End-User Industries | 17% |
Graphene’s antibacterial properties make it highly suitable for medical instruments and implants. Furthermore, it has shown remarkable potential in helping treat diseases such as cancer.
Another one of the material’s applications is its ability to emit high-speed light pulses, or to combine graphene’s thinness and high-conductivity to create the tiniest possible light sources.
All in all, it’s difficult to sum up graphene’s properties and potential applications in one place. The supermaterial has been covered and cited in thousands of academic journals, and comes up with over 2 million search results on Google Scholar.
Graphene Commercialization
Graphene has evolved from a scientific breakthrough to a commercial reality in less than two decades, putting it firmly on the radar of many future-focused investors.
But despite the strides the industry is making, it is still in its infancy, and therefore challenges exist on the path to widespread adoption. Here are the top five commercialization obstacles perceived by industry players.
| Obstacle | % of survey respondents |
|---|---|
| Cost | 31% |
| Production Methods, Scaling, and Distribution | 21% |
| Material Quality/Consistency | 17% |
| Lack of Knowledge/Awareness | 15% |
| Dispersion/Handling | 14% |
When transitioning cutting-edge materials from the laboratory to consumer products, challenges like these can be expected. But one company is tackling them head-on.
By producing 99.8% pure graphene, and ensuring batch-to-batch consistency, HydroGraph is helping meet the growing demand for graphene products across industries while addressing challenges like cost, scale, and quality.
Interested in learning more? Explore investment opportunities with HydroGraph now.
-
United States3 weeks agoCharting the Rise of America’s Debt Ceiling
By June 1, a debt ceiling agreement must be finalized. The U.S. could default if politicians fail to act—causing many stark consequences.
-
Money3 weeks agoRanked: The World’s Top 50 Endowment Funds
Endowment funds represent the investment arms of nonprofits. See the worlds top 50, which collectively have over $1 trillion in assets.
-
Demographics3 weeks agoVisualizing the American Workforce as 100 People
Reimagining all 200 million of the American workforce as 100 people: where do they all work, what positions they hold, and what jobs they do?
-
Money1 month agoVisualized: Real Interest Rates by Country
What countries have the highest real interest rates? We look at 40 economies to analyze nominal and real rates after projected inflation.
-
Banks2 months agoRanked: The Largest Bond Markets in the World
The global bond market stands at $133 trillion in value. Here are the major players in bond markets worldwide.
-
United States2 months agoVisualized: The Largest Trading Partners of the U.S.
Who are the biggest trading partners of the U.S.? This visual showcases the trade balances between the U.S. and its trading partners.
-
Central Banks4 weeks agoComparing the Speed of Interest Rate Hikes (1988-2023)
-
China2 weeks agoRanked: The Cities with the Most Skyscrapers in 2023
-
War4 weeks agoMap Explainer: Sudan
-
Mining2 weeks agoRanked: The World’s Biggest Steel Producers, by Country
-
Travel4 weeks agoVisualized: The World’s Busiest Airports, by Passenger Count
-
Visual Capitalist2 weeks agoJoin Us For Data Creator Con 2023
-
AI4 weeks agoVisualizing Global Attitudes Towards AI
-
Money2 weeks agoCharted: Public Trust in the Federal Reserve