Apple is one of the most successful corporations in the world, evolving from a niche computer manufacturer into a global technology powerhouse. Understanding the company’s trajectory requires examining its cyclical history of near-failure and dramatic resurgence, its current financial structure, and the external forces that define its future. The story of “what happened to Apple” is one of strategic focus, operational mastery, and the continuous search for the next major platform. Its unique blend of hardware design, software integration, and a highly profitable services business allows it to command a market valuation that sets it apart from competitors.
The Early History and Near Collapse
The company began as a manufacturer of personal computers, finding early success with the Apple II and the Macintosh in 1984, which popularized the graphical user interface. Internal conflicts led to the departure of co-founder Steve Jobs in 1985, beginning a period of corporate drift. The subsequent decade was marked by scattered product lines and a loss of market focus, leading to a decline in market share as Microsoft’s Windows gained dominance.
By the mid-1990s, Apple was in financial turmoil, posting massive losses and struggling to maintain relevance. Products like the Newton MessagePad failed, and the company was reportedly only 90 days away from running out of operational cash in 1997. The board acquired Jobs’ company, NeXT, to modernize the Macintosh operating system, which brought Jobs back to the struggling company.
The Jobsian Renaissance and Ecosystem Creation
Upon his return, Jobs immediately instituted a radical simplification of the product line, focusing on just four products: consumer desktop, professional desktop, consumer portable, and professional portable. This pruning eliminated 70% of the company’s projects and allowed for a singular focus on quality and design. The first product of this new era was the iMac in 1998, an all-in-one computer with a translucent, colorful design that established Apple as an innovator.
The next strategic move was to expand into the broader consumer electronics space. The launch of the iPod in 2001 and the accompanying iTunes Music Store created a tightly integrated system of hardware, software, and content. This blueprint was realized with the introduction of the iPhone in 2007, followed by the App Store in 2008. The App Store established the foundational “walled garden” ecosystem, turning the iPhone into a persistent, multi-purpose device.
The Transition to Tim Cook and Operational Scaling
The succession of Tim Cook to Chief Executive Officer in 2011 marked a shift toward operational perfection. Cook, who joined Apple in 1998 as the Senior Vice President for Worldwide Operations, leveraged his expertise to transform the supply chain into a global logistics powerhouse. He implemented a “just-in-time” inventory system, significantly reducing the amount of cash tied up in warehousing and stock.
The operational strategy included reducing the number of strategic suppliers and building deep, long-term relationships with the remaining partners. This approach created a lean, agile, and cost-effective manufacturing engine that could produce products at an unprecedented scale. This mastery of logistics allowed Apple to maximize margins and ensure a consistent global supply of devices, enabling the financial growth that followed the iPhone’s success.
The Current Business Model: Products Versus Services
Apple’s current financial structure reveals a strategic shift that hedges against the cyclical nature of hardware sales. For the fiscal year 2024, the company generated total revenue of approximately $391 billion. The iPhone remains the largest revenue stream, accounting for 51% of total net sales at roughly $201.2 billion. The remaining hardware segments—Mac, iPad, and Wearables—make up the rest of the product revenue.
The Services division is the engine of profit stability, accounting for 25% of total revenue at around $96.2 billion. This segment includes high-margin offerings such as:
- The App Store
- Apple Music
- iCloud
- Apple Pay
The gross margin for Services is approximately 73.9%, nearly double the 37.2% gross margin seen in the hardware division. This subscription-based revenue stream provides financial resilience and predictable cash flow, offsetting potential slowdowns in the mature smartphone market.
Navigating Geopolitical and Regulatory Challenges
The company’s global position has placed it at the center of significant external pressures related to geopolitics and regulation. Apple’s supply chain is heavily concentrated in China, which serves as both the primary manufacturing hub and a substantial consumer market. This reliance creates vulnerability to US-China trade tensions, new tariffs, and the risk of consumer shifts toward domestic brands like Huawei.
In response, Apple initiated a “China Plus One” strategy, diversifying its manufacturing footprint into countries like India and Vietnam. For example, iPhone production in India has increased significantly, though replicating China’s established infrastructure is a slow and costly undertaking. Simultaneously, the company faces antitrust scrutiny globally regarding its App Store policies. The European Union’s Digital Markets Act (DMA) designates Apple as a “gatekeeper,” forcing it to allow third-party app stores and alternative payment systems. Apple is challenging the DMA in court, arguing that the requirements threaten user privacy and security. The company also faces a major US Justice Department monopoly case targeting the same ecosystem restrictions.
The Search for the Next Major Platform
The company’s future growth hinges on its ability to define the next foundational computing platform, much as it did with the iPhone. Apple’s major investment in this area is the Vision Pro, a mixed-reality headset the company frames as a “spatial computing” device running on the visionOS operating system. The Vision Pro features a powerful dual-chip design to deliver a seamless and low-latency experience.
Launched with a high price point of $3,500, the initial version targets developers and professional users, aiming to seed the ecosystem before a mass-market rollout. The company is also making significant investments in generative AI, which is expected to be deeply integrated across its software platforms to enhance existing products. While speculation about an “Apple Car” or other ventures persists, the immediate focus remains on turning spatial computing and advanced on-device intelligence into a new, profitable product category that can extend the company’s dominance beyond the smartphone era.