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How Big Tech Makes Its Money

Between smartphones and other products, online retail, software, services, and advertising, the "big five" US tech companies made a whole lot of money last year. Here's where it came from.

By Angela Moscaritolo
November 5, 2019
WhyAxis How tech giants make their billions: Visual Capitalist

Collectively, the "big five" US tech companies—Apple, Amazon, Google parent Alphabet, Microsoft, and Facebook—raked in more than $800 billion in revenue in 2018. But how did they make their money? An infographic from Visual Capitalist (embedded in full below) breaks it down.

The Why Axis Bug According to Visual Capitalist, 62.8 percent of Apple's $265.6 billion in revenue last year came from iPhone sales. Mac computers accounted for 9.6 percent, and iPads made up 7.1 percent. All other Apple products and services together, including Apple Watch, Apple TV, Beats devices, Apple Pay, and AppleCare, accounted for 20.6 percent.

Amazon earned 52.8 percent of its $232.9 billion in revenue last year from its online stores, 18.4 percent from third-party sellers, 11 percent from Amazon Web Services, and 6.1 percent from subscription services such as Prime. The online retail giant also earned a pretty penny offline—7.4 percent of Amazon's revenue came from its physical stores.

"Amazon's fastest growing segment is offline," Visual Capitalist wrote. "Sales in physical stores jumped 197 percent between 2017 and 2018."

Microsoft, meanwhile, "has the most diversified revenue of any of the tech giants," Visual Capitalist wrote. Of its $110.4 billion in revenue last year, 25.7 percent came from Office products, 23.7 from Azure server products, 17.7 percent from Windows, 9.4 percent from gaming, 6.4 percent from search ads on Bing, 5.3 percent from enterprise services, 4.7 percent from devices such as Surface PCs, and 4.8 from LinkedIn.

Alphabet and Facebook are a different story. The lion's share of Alphabet's 136.8 billion and Facebook's $55.8 billion in revenue last year came from advertising, according to Visual Capitalist.

WhyAxis How tech giants make their billions: Visual Capitalist

Startup Revenue: From Zero to $1 Million in a Year
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About Angela Moscaritolo

Managing Editor, Consumer Electronics

I'm PCMag's managing editor for consumer electronics, overseeing an experienced team of analysts covering smart home, home entertainment, wearables, fitness and health tech, and various other product categories. I have been with PCMag for more than 10 years, and in that time have written more than 6,000 articles and reviews for the site. I previously served as an analyst focused on smart home and wearable devices, and before that I was a reporter covering consumer tech news. I'm also a yoga instructor, and have been actively teaching group and private classes for nearly a decade. 

Prior to joining PCMag, I was a reporter for SC Magazine, focusing on hackers and computer security. I earned a BS in journalism from West Virginia University, and started my career writing for newspapers in New Jersey, Pennsylvania, and West Virginia.

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