Besides being massive, Apple Inc. (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN) may not seem to have a whole lot in common. As an e-commerce company, Amazon.com, Inc. (NASDAQ:AMZN) should have the upper hand with how much revenue it can generate per customer. With minimal overhead costs, will they be able to keep up with Apple’s numbers?
Apple’s figures
Apple Inc. (NASDAQ:AAPL)’s numbers this quarter were pretty impressive. While its sales of Macs and iPods were down, iPhones and iPads sky rocketed from the same period a year ago. These devices netted a total increase of 7.9 million units, highlighted by iPad sales that increased by 7.7 million, or 65%.
These 66.4 million devices sold by Apple Inc. (NASDAQ:AAPL) in Q1 generated $43.6 billion dollars. While it would be impossible to tell how many of those users downloaded apps or used iTunes, we do know that less than 6% of Apple’s revenue was generated through them. We also don’t know how many people bought both an iPad and an iPhone, or any other combination of iDevices.
Amazon’s figures
Amazon.com, Inc. (NASDAQ:AMZN) reportedly has 209 million active users. Amazon generated approximately $16 billion of revenue in the quarter, only about 37% of Apple Inc. (NASDAQ:AAPL)’s revenue. These figures show that Amazon made about $76.56 per user. Based on the above figures, Apple generates $656.63 per customer. CNET has released figures showing that Apple Inc. (NASDAQ:AAPL) generates $57.60 per store visitor.
Comparison
If these figures are true, Apple is generating 1 customer to every 8.57 visitors. While there is no accurate way to measure how many people have visited Amazon.com, Inc. (NASDAQ:AMZN)’s website, we can be assured that more people visit it than the 209 million active users. For the sake of this example, let’s assume the ratio is similar. If Amazon generated 1 customer for every 8 visitors to its website, it would have 1.6 billion users. Not only is this ridiculous, but to keep pace with Apple’s revenues, Amazon.com, Inc. (NASDAQ:AMZN) would have to generate $96.31 billion every quarter.
Amazon is an e-commerce company, so it should fare better when revenues are compared to employees. After all, it doesn’t have all the brick and mortar stores that Apple does. Surprisingly, this isn’t the case. Amazon generates $180,995 for each of its 88,400 employees. Apple manages to generate $598,901 for each of its 77,800 employees.
This can only mean one thing: Apple knows how to generate revenue.
If Amazon was able to accomplish this same ratio, they would be generating approximately $53 billion of revenue each quarter. Now, don’t get me wrong: Amazon is growing very quickly, with revenues increasing 28% year-over-year. It’s active user base has also grown 21%. Amazon simply hasn’t found a way to maximize its revenues as well as Apple has.
Where does it come from?
There is a big difference in how these companies make money. Apple derives 77.5% of its revenues from mobile devices (iPhones, iPads, and iPods). This means that Apple has generated approximately $131 billion from mobile devices in the past twelve trailing months. Just think, that is almost as much revenue as Apple has in available cash! That’s a crazy thought.Apple might understand the importance of the mobile platform better than any other company out there.
Amazon acquires about 55% of its revenues from electronics and general merchandise. Kindle hardware generates just under 9% of its total revenues, but that figure will likely jump as the company recently announced expanding sales to 170 additional countries. Amazon has received help from numerous companies in doing this, but only one can claim to own the best selling device on Amazon. For several months, Samsung‘s Chromebook has been the top seller on the retail giant’s website. But that’s not the only place Samsung generates its income.
Not only has Samsung’s Chromebook been the top seller on Amazon, but it has also sold over 10 million Galaxy S4 units in its first month of sales. Although this doesn’t beat Apple’s record, it is a personal best for the company. In fact, it took fifty days for the Galaxy S3 to sell the same amount of units, and almost five months for the Galaxy S2. Not only is Samsung growing, but they are growing quickly.
The foolish bottom line
Apple continues to set records in regards to its revenues. The biggest concern for investors is how much more room Apple has to grow. Amazon has a lot of room to grow, and is already applying pressure to many stores such as Best Buy Co., Inc. (NYSE:BBY) and Barnes & Noble, Inc. (NYSE:BKS). Investors looking for a company with tremendous growth opportunities should love Amazon and Samsung, which is growing very quickly. On the flip side, Apple may not have huge growth potential, but it did announce plans to release $100 billion to shareholders by 2015, in dividends and share buybacks.
The article Amazon or Apple: The King of Revenue originally appeared on Fool.com and is written by Tyler Wofford.
Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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