Both target consumers and businesses, offering a range of products and services.
Apple primarily focuses on consumer electronics, software, and services. Google offers a wide array of products and services, with a strong emphasis on online advertising, cloud computing, and search-related services.
Strong consumer electronics and software focus (Apple). Dominance in online advertising and search (Google).
Value Proposition
Innovative design, user experience, ecosystem
Search, cloud, advertising, data analytics, open-source
Both provide software solutions, but with different emphases.
Apple emphasizes innovative design, user experience, and its ecosystem (hardware, software, and services). Google focuses on search, cloud computing, online advertising, data analytics, and open-source software.
Ecosystem and user experience (Apple). Dominance in search and online advertising (Google).
Channels
Apple Stores, online platforms, partnerships
Online platforms, partnerships, digital advertising
Both use online platforms, partnerships, and digital advertising channels for distribution.
Apple relies on its Apple Stores, online platforms, and partnerships for distribution. Google leverages online platforms, partnerships, and digital advertising to reach its target audience, particularly through its search engine and display advertising networks.
Iconic retail presence and direct-to-consumer approach (Apple). Dominance in digital advertising and search (Google).
Customer Relationships
Retail experience, customer support
Self-service, online support, advertising
Both offer customer support but with different delivery methods.
Apple emphasizes the in-person retail experience complemented by customer support. Google provides self-service options, online support, and generates customer relationships through its advertising services and online platforms.
Iconic retail stores and personal support (Apple). Efficient self-service and online support (Google).
Software development, search algorithms, data centers
Both involve software development activities but differ in focus.
Apple’s key activities include hardware design (for products like iPhones and Macs), software development for its ecosystem, and manufacturing. Google’s activities revolve around software development, particularly search algorithms, data centers, and the management of its advertising platforms.
Hardware design and ecosystem development (Apple). Dominance in search algorithms and data centers (Google).
Key Resources
Design talent, manufacturing facilities
Software engineers, data centers, advertising networks
Both rely on their core resources.
Apple’s key resources include design talent for product innovation and manufacturing facilities for hardware production. Google’s resources are primarily software engineers, data centers, and extensive advertising networks for delivering ads across its platforms.
Design innovation and manufacturing (Apple). Software expertise, data infrastructure, and advertising (Google).
Key Partnerships
App developers, suppliers, app ecosystem
OEMs, content creators, advertisers
Both collaborate with partners to enhance their offerings.
Apple partners with app developers, suppliers, and maintains a robust app ecosystem. Google collaborates with original equipment manufacturers (OEMs), content creators, and advertisers to expand its reach and monetize its platforms, particularly through its advertising services.
Strong app ecosystem and developer relationships (Apple). Extensive partnerships and advertising network (Google).
Revenue Streams
Hardware sales, services, app sales
Advertising, cloud services, licensing
Both generate revenue from hardware sales and services, but their core revenue sources differ.
Apple generates revenue from hardware sales (e.g., iPhones, Macs), services (e.g., App Store, Apple Music), and app sales. Google’s primary revenue streams come from advertising (e.g., Google Ads), cloud services (e.g., Google Cloud), and licensing agreements for Android.
Diverse revenue sources including services (Apple). Dominance in online advertising and cloud services (Google).
Cost Structure
Manufacturing costs, R&D, marketing
R&D, data centers, advertising
Both incur costs related to R&D, marketing, and infrastructure.
Apple’s cost structure includes manufacturing costs, extensive R&D investment, and marketing expenses for promoting its products and services. Google’s cost structure comprises R&D expenses, data center maintenance, and advertising costs related to its advertising platforms.
Manufacturing and design costs (Apple). Extensive R&D and data center costs (Google).
Following a comparison between Apple and Google business models that looks at the financial metrics of both companies to understand how they differ from the business strategy standpoint.
In 2022, Apple is worth two and a half trillion dollars. Apple generated over $205 billion from iPhone sales in 2022, which accounted for over 52% of its net sales—followed by services revenues at over $78 billion, wearables and accessories at over $41 billion, Mac sales at $40 billion, and iPad sales at over $29 billion.
Apple’s business model is based on the sales of its products. In fact, as of 2021, the iPhone is the most sold product, adding to over sixty percent of the company’s overall revenues.
The iPhone’s strength also derives from Apple’s ability to own the whole supply chain.
Apple’s made over $394 billion in revenues in 2022, of which over $205 billion or 52% of its total revenues came from the iPhone. Yet, the iPhone isn’t just a hardware product; it’s a businessplatform that combines hardware (iPhone), an operating system (iOS), and a marketplace (the App Store). Thus, the company still makes most of its money around a single product which powers up an entrepreneurial ecosystem.
Although this strategy has worked so well, it is also quite risky.
If Apple’s sales slowed down in the future, this would trigger a domino effect too on its business model.
However, things like services and other products also increased.
By looking at revenues and operating income, the Americas (North and South America) represents the most profitable segment for the company.
If Apple loses its market dominance in the future, it will pose a severe financial risk to its success.
Apple has a business model that is divided into products and services. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services.
Google allows each day for billions of people to find the answers they need. Businesses can enhance their revenues through AdWords by tracking their spending, conversion, and opportunities.
Content creators can easily monetize their content by allowing Google to show targeted ads within their “web properties.” In fact, as of 2021 over 80% of Google’s revenue come from its advertising networks.
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).
The Facebook advertising model vs. the Google advertising model
Key Highlights from the Comparison of Apple and Google Business Models:
Apple Business Model:
Revenue Composition: Apple’s business model heavily relies on the sales of its products. In 2022, the iPhone accounted for over 52% of its net sales, followed by services, wearables and accessories, Mac sales, and iPad sales.
iPhone Dominance: The iPhone is Apple’s flagship product and has historically contributed to over 60% of the company’s overall revenues. It serves as a business platform, combining hardware, an operating system (iOS), and a marketplace (App Store).
Supply Chain Control: Apple’s strength comes from its control over the entire supply chain, which contributes to its ability to provide a seamless user experience.
Risk of Dependence: While the strategy has been successful, it also poses a risk as Apple’s revenue heavily relies on the iPhone. A slowdown in iPhone sales could negatively impact the entire businessmodel.
Diversification Efforts: Apple is working to diversify its revenue streams, with increasing sales in services and other product categories like Mac, iPad, and accessories.
Geographic Revenue: The Americas (North and South America) represent the most profitable segment for Apple, based on revenues and operating income.
Market Dominance Risk: Apple’s success is tied to maintaining market dominance. Any loss in market share could pose a significant financial risk to the company.
Google Business Model:
Value Creation: Google’s business model focuses on creating value for stakeholders beyond just shareholders. It aims to provide information and answers to billions of users daily.
Advertising Revenue: Over 80% of Google’s revenue comes from its advertising networks, particularly through products like AdWords and AdSense. Businesses can track spending, conversions, and opportunities through AdWords.
Monetizing Content: Content creators can monetize their work by allowing Google to display targeted ads within their web properties.
Diverse Revenue Streams: Google’s revenue comes from various sources, including Google search and other services, network members (Adsense and AdMob), YouTube ads, cloud services, and other sources like Google Play and hardware devices.
YouTube’s Impact: YouTube contributes significantly to Google’s revenue through its ads, showcasing the platform’s prominence as a source of income.
Google is primarily owned by its founders, Larry Page and Sergey Brin, who have more than 51% voting power. Other individual shareholders comprise John Doerr (1.5%), a venture capitalist and early investor in Google, and CEO, Sundar Pichai. Former Google CEO Eric Schmidt has 4.2% voting power. The most prominent institutional shareholders are mutual funds BlackRock and The Vanguard Group, with 2.7% and 3.1%, respectively.
Google (now Alphabet) primarily makes money through advertising. The Google search engine, while free, is monetized with paid advertising. In 2023, Alphabet generated over $175B from Google search, $31.51B billion from the Network members (Adsense and AdMob), $31.31B billion from YouTube Ads, $33B from Google Cloud, and $34.69B billion from other sources (Google Play, Hardware devices, and other services). And $1.53B from its other bets.
Google is an attention merchant that – in 2022 – generated over $224 billion (almost 80% of revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $29 billion segment), and Google Cloud ($26.2 billion).
Of Google’s (Alphabet) over $307.39 billion in revenue for 2023, Google also generated for the first time, well over 1.5 billion dollars in revenue from its bets, which Google considers potential moonshots (companies that might open up new industries). Google’s bets also generated a loss for the company of over $4 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries, which are ramping up in 2023.
In 2023, Alphabet’s (Google) Cloud Business generated over $33 billion within Alphabet’s Google overall businessmodel, and it was also profitable, with over $1.7 billion in profits. Google Cloud is instrumental to Google’s AI strategy.
Google is an attention merchant that – in 2023 – generated $237.85 billion (over 77% of its total revenues) from ads (Google Search, YouTube Ads, and Network sites), followed by Google Play, Pixel phones, YouTube Premium (a $31.5 billion segment), and Google Cloud (over $33 billion).
The traffic acquisition cost represents the expenses incurred by an internet company, like Google, to gain qualified traffic – on its pages – for monetization. Over the years, Google has been able to reduce its traffic acquisition costs and, in any case, to keep it stable. In 2023 Google spent 21.39% ($50.9 billion) of its total advertising revenues ($237.8 billion) to guarantee its traffic on several desktop and mobile devices across the web.
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it reported more than $31B in revenues by 2023. YouTube also makes money with its paid memberships and premium content.
In 2023, Google’s search advertising machine, generated over 175 billion dollars. Whereas Microsoft’s Bing generated 12.2 billion dollars. Thus, as of 2023, Google’s search advertising machine is over 14x larger than Microsoft’s search advertising machine.
Google makes most of its money from advertising. Indeed total advertising revenue represented nearly 78% of Google’s (Alphabet) overall revenues for 2023. Google Search represented nearly 57% of Google’s total revenues. Google generated $307.39B in revenues in 2022, and $73.79B billion in net profits.
In 2023, Google generated $307.39 billion, comprising $175B in Google Search, $31.51B in YouTube ads, and $31.31B in Google network revenue. $34.69B in other revenue, $33B in Google cloud, $1.53B in other bets.
In 2023, Google generated 237.85B in revenue in advertising, which represented over 77% of its total revenues of $ 307.39 B. In 2022, Google generated $224.47B in revenues from advertising, which represented almost 80% of the total revenues, compared to $282.83B in total revenues. Therefore, most of the revenues from Alphabet, the mother company of Google, come from advertising.
At the end of December 2022, Google had over 190,000 employees. On January 20, Google announced the layoff of 12,000 employees within the company, thus bringing the number of total employees by December 2023 to 182,502 full-time employees.
Google generated $1,684,332 per employee in 2023, compared to $1,486,779 per employee in 2022. As of January 2023, as the company announced a mass layoff, it brought back its revenue per employee at $1,586,880, still behind the peak in 2021, for $1,840,330.
Apple has a business model that is divided into products and services. Apple generated over $394 billion in revenues in 2022, of which $205.5 came from iPhone sales, $40 billion came from Mac sales, over $41 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $29.3 billion came from iPad sales, and $78.13 billion came from services.
iPhone and Services sales represented the main revenue drivers in 2022. Within the service revenues, the fastest growing sub-segment was the advertising business Apple built on top of the App Store, followed by the Mac, Accessories & Wearables, and the iPad.
In 2022, most of Apple’s sales (62%) came from indirect channels (comprising third-party cellular networks, wholesalers/retailers, and resellers). These channels are critical for sales amplification, scale, and subsidies (to enable the iPhone to be purchased by many people). In comparison, the direct channel represented 38% of the total revenues. Stores are critical for customer experience, enabling the service business, and branding at scale.
Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized, among consumers. The three fundamental value propositions of Apple’s brand leverage the “Think Different” motto; reliable tech devices for mass markets; and starting in 2019, Apple also started to emphasize more and more privacy to differentiate itself from other tech giants.
In 2022, Apple is worth two and a half trillion dollars. Apple generated over $205 billion from iPhone sales in 2022, which accounted for over 52% of its net sales—followed by services revenues at over $78 billion, wearables and accessories at over $41 billion, Mac sales at $40 billion, and iPad sales at over $29 billion.
In 2022, the iPhone represented over 52% of total Apple’s sales and the underlying force that powers up Apple’s business ecosystem. In 2022, the iPhone generated over $205 billion in revenue, compared to almost $192 billion in 2021.
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Apple’s made over $394 billion in revenues in 2022, of which over $205 billion or 52% of its total revenues came from the iPhone. Yet, the iPhone isn’t just a hardware product; it’s a businessplatform that combines hardware (iPhone), operating system (iOS), and a marketplace (the App Store). Thus, the company still makes most of its money around a single product which powers up an entrepreneurial ecosystem.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
