Why iPhone X Is Apple Investors' Worst Nightmare Come True

Over the past decade, Apple's (NASDAQ: AAPL) financial performance has become increasingly reliant on a single product: the iPhone. This is not news. These days, the iPhone typically comprises between 60% and 70% of revenue in any given quarter.

For most of the iPhone's history, Apple only released a single model per year, efficiently focusing its development resources and strategically choosing product depth over product breadth, which incidentally concentrates product risk. Starting in 2013, Apple released two models per year, and then unveiled three models in 2017 for the first time. Theoretically, diversifying the lineup reduces risk, but ultimately the disproportionate importance of the iPhone inevitably created a massive risk factor that investors have had to contemplate for years: What if an iPhone flops?

Data sources: SEC filings and author's calculations. Chart by author. Calendar quarters shown.

Source: Fool.com