Mike Wuerthele
Apple's earnings once again broke records for the company, but Services stands out, earning the company $7.17 billion just on Apple Pay, digital content, and others.
The $7.17 billion Apple generated in revenue is a new record for the company, 13% higher than last quarter, and 18% higher than the year-ago quarter. Year-over-year, Services posted the largest gain on a percentage basis of all of Apple's business segments.
Apple CEO Tim Cook noted in the earnings conference call that Apple expects services to be the size of a Fortune 100 company by the end of the year.
Additionally, regarding Services, there are now 150 million paid customer subscriptions, over 2 million small businesses are accepting Apple Pay, and the company's goal is to double the services business in the next four years.
In July, Cook said he expects services, which includes iTunes, iCloud, Apple Music, Apple Pay, Apple Care and the various App Stores, to generate revenues equivalent to that of a Fortune 500 company by 2017.
Analysts predict that services revenue is expected to grow 17 percent per year through 2021, with a growth in hardware revenue of 2.4 percent, with a continuation of about 30 percent annual growth in Apple's App Stores per year. One analyst called the App Store which is currently the prime mover of Apple's Services revenue "one of the best business models ever created."
On Tuesday, Apple reported that its holiday 2016 quarter was the company's biggest ever, soaring to new heights on sales of 78.3 million iPhones following the launch of the blockbuster iPhone 7 series, exceeding Wall Street expectations by all measures.
AppleInsider Staff
Chip Loder
Christine McKee
Malcolm Owen
William Gallagher
Andrew Orr
7 Comments
It's the best and biggest company in the world!!
The growth in Services is especially impressive considering that last years number includes $548 million from the Samsung judgment. If you back that out the YoY growth was 30%. Even accounting for the extra week (i.e. multiplying this past quarter's Services number by 13/14ths) the growth would be around 21%.
Remember when $7billion and change was the quarterly sales for the entire company? That's startling change in less than a decade.
Want a lesson in how not to invest? Check out this guy: http://www.marketwatch.com/story/this-trader-bets-it-all-on-apple-getting-crushed-after-earnings-2017-01-30 He inherited a couple million bucks and blew it on some risky market gambles ("lost with Brexit" "lost with Hillary") and now in a "YOLO" move he bet all his remaining money on AAPL tanking after the earnings.