In 2016, Apple announced the plan to double its services revenue by the end of 2020. The company achieved that goal six months ahead of schedule.
Apple continues to grow despite the condition of the world economy
that it expected to reach the goal during its Q2 earnings call, and has now crossed it. The services revenue has seen consistent growth of over 15% year-over-year every quarter with only two exceptions -- Q3 2019 and Q3 2020.
The number of transacting and paid accounts reached a new all-time high, with paid accounts increasing in the "double digits" in all geographic segments, CFO Luca Maestri said. Overall, the company now boasts 550 million paid subscriptions across its services, up 130 million year-over-year. Apple expects to exceed the 600 million paid subscriber mark by end of calendar 2020.
Apple services growth has slowed, but is still growing YoY.
Even with the slow decline in annual gains, the increase in revenue was inevitable as Apple pushed its various segments on customers more than ever.
Apple began its pivot to services revenue in 2015 with the release of Apple Music, and has since pushed for growth in the segment hard. Apple TV+, Apple News, Apple Arcade, and subscriptions in the App Store have all driven that revenue higher.
The company has seen much scrutiny over its business practices, especially when dealing with developers. On Wednesday Tim Cook and other tech CEOs were questioned during a U.S. House antitrust hearing, and Cook was specifically pressed on App Store guidelines and the 30% take from IAP and subscriptions. The Apple CEO was adamant that their rules were fair and the App Store and Apple existed to create jobs and enrich their users.
Apple doubled the size of its services revenue in four short years
Apple hopes to ease investor concerns over slowed iPhone growth by showing alternate revenue sources. Apple services have become more valuable than some Fortune 100 companies on its own, and is still growing.