Where would Apple be without the iPhone and iPad?

Seems a lot of people have been playing mind games with Apple (Nasdaq: AAPL) of late — the type of games that involve fantastical what-ifs and dreams of what could have been.

Some analysts on the Street have done the number-crunching on Cupertino’s effect on the S&P 500 (hint — it helps a lot); our own Morgan Housel Foolishly broke it down some more. We recently imagined an insightful competitive landscape with no Apple iSights in sight.

Can I play, too?
Now for a slightly different approach. In this scenario, the Mac maker is still the same company we know and love, but Macs are its main flame. Where would Apple be without the iPhone and iPad?

I’ll let it keep the iPod, since it’s had that one for more than a decade now. You’ll know the company, but you might not love it so much in this alternative reality.

So much of Apple’s fortunes in recent years are directly attributable to the runaway success of the iPhone and iPad. Those segments combined chalked up more than 72% of the $46.3 billion in sales last quarter. Magically whisking those away leaves a gaping hole in its income statement.

Here’s a look at how Apple’s revenue over the past three years would have looked without those two magical devices.


Sources: earnings press releases, author’s calculations.

This time frame includes the first iPad’s launch in Apple’s third quarter of fiscal 2010. Excluding the iPhone and iPad would have clearly been disastrous for Apple’s top line. Magical, indeed.

All that money makes you look fat
Over the past four quarters, Cupertino has seen $127.8 billion in revenue. Let’s slim that down to $41.9 billion. That brings Apple back down to Earth on a trailing-12-month sales basis to bump elbows with and even look up to other tech players like chipmaker Intel(Nasdaq: INTC) with $54 billion, PC maker Dell (Nasdaq:  DELL) with $62.1 billion, and longtime rival Microsoft (Nasdaq: MSFT) with a towering $72.1 billion. The Mac maker would still have Google (Nasdaq: GOOG) beat, though, with its $37.9 billion.

In fairness, Apple would lose out a little more in the form of App Store sales, which wouldn’t really exist anymore, either. Although on the other hand, iPod revenue would be stronger, since the iPhone and iPad aren’t there to cannibalize them.

Apple closed out yesterday with a $585.9 billion market cap, and that figure’s going to need to lose some weight as well. Shares currently trade at about 4.6 times sales, which is near the average over the past few years.

Using that price-to-sales ratio implies that Apple’s market cap would be just $192.7 billion sans iPhone and iPad. Let’s keep stacking it up against the rivals we just mentioned.


Revenue (No iPhone or iPad)

Revenue (Actual)

Market Cap (No iPhone or iPad)

Market Cap (Actual)

Apple $41.9 billion $127.8 billion $192.7 billion $585.9 billion
Intel $54 billion $137.5 billion
Dell $62.1 billion $28.6 billion
Microsoft $72.1 billion $255.7 billion
Google $37.9 billion $203.8 billion

Sources: Reuters, Morningstar, author’s calculations.

Apple’s new market cap would be smaller than that of two of its most important current rivals. However, Apple and Google wouldn’t really compete as much without the presence of Apple’s mobile devices. It would still stand tall above Dell in market cap, while falling short in sales.

Back to the Mac
Good old Macs would again be the king of the product hill, comprising 42% of TTM revenue, as opposed to the 14% it’s been relegated to in reality. They would be the most important product family, albeit not as important as iPhones and iPads combined are today.

Apple investors surely wouldn’t be enjoying the same gains, and mobile would probably be more of a slow migration of blind geese than a full-speed revolution.

It’s a good thing this is just a game.

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