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TheStreet Open House

2 Really Dumb Ideas Involving Apple, Microsoft, Ford and Yahoo!

I'm not sure where this notion came from that Apple makes a significant amount of money -- relative to the whole -- on anything but hardware. It monetizes mobile devices and computers in the most basic way -- by selling them to people.

According to my math, 11.3% of Apple's revenue in the most recent quarter came from software and services (defined as "revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBookstore, and revenue from sales of AppleCare, licensing and other services" in the company's 10Q). Hardware sales generated the remaining 88.7%.

Granted that share of the pie is growing -- a year ago, software and services, though measured differently, accounted for about 8.4% of total revenue -- but it's not Apple's bread and butter. Shouldn't be. Probably never will be. And, if it wants to continue growing (or "monetizing") software- and services-related revenue, why would Apple acquire a company with a zillion employees like Yahoo!?

Quite frankly, that type of move goes against pretty much everything that has made Apple great. It makes small acquisitions that, for all intents and purposes, end up flying under the radar. It doesn't deal in bloat. It focuses on a relatively small number of projects. That's just the opposite of Yahoo!, a company that's more difficult to pin down.

Gregg Greenberg dazzles TheStreet each week with his "Five Dumbest Things" that happened on Wall Street. At this rate, I might be able to accompany him with a review of the dumbest things that took place in tech.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a columnist and TheStreet's Director of Social Media. Pendola makes frequent appearances on national television networks such as CNN and CNBC as well as TheStreet TV. Whenever possible, Pendola uses hockey, Springsteen or Southern California references in his work. He lives in Santa Monica.
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