Is Apple Stock Halal to Invest in? Facts you should know :: 6th November 2023

Business Sector Screening:

Apple Inc. is an American multinational technology company that designs a wide variety of consumer electronic devices, including smartphones (iPhone), tablets (iPad), PCs (Mac), smartwatches (Apple Watch), and TV boxes (Apple TV), among others.

The company derives its major revenue from:

• iPhone: consisting of revenue from sale of iPhones

• Mac: consisting of revenue from sale of Mac books

• iPad: consisting of revenue from sale of iPads

• Wearables, Home and Accessories: consisting of revenue from sales of AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and Apple-branded and third-party accessories

• Services: consisting of revenue from sales of Company’s digital content stores and streaming services, AppleCare, iCloud, licensing and other services

Let’s have a look at the segments from which the company derives its revenue from and apply the Shariah screens on them:         

Operating Revenue: (In millions of USD)

for year ended 30^th September 2023

Areas of Concern from Shariah Perspective:

1) Digital Content Stores and Streaming Services: The Company’s various platforms allow customers to discover and download applications and digital content, such as books, music, video, games and podcasts. They also offer subscription based digital content streaming services, including Apple Music, on-demand radio stations, and Apple TV.

2) Other Services: It includes game subscription service and Apple Card which is a co-branded credit card.

The actual break-up for this revenue segment is unavailable. The segment has provided information that the company offers streaming services, music, videos, games and other digital contents through its various platforms, which is considered as non-compliant activity As per our Shariah screening norms.

It is also given that the service revenue includes income from Apple Card- a Co-branded credit card, which is considered as a financial service, making it Non-Compliant as per out Shariah screening norms.

Hence, we have assumed 25% of revenue from these two business categories (combined) as Non-permissible income.

Let’s have a look at the non-operating income of the company.

Non-operating Revenue: (In millions of USD)

For year ended 30^th September 2023

It is clear from the table above that the non-operating income of the company includes interest income, and Dividend Income from Investments which is Shariah not compliant. This amount is included for the calculation of the Sector Compliance and Dividend Purification.

Sector Compliance Calculation:

Dividend Purification Calculation:

Financial Ratio Screen:

(All figures in millions of USD for the Quarter ended 1^st July 2023)

Source: All the above information is based on the website of the company and the latest Quarterly Report for the period ended 1^st July 2023.

Conclusion:

Given the above information, we at Islamicly believe that Apple Inc., is a Shariah NOT Compliant company as per the Shariah screening criteria.