Apple posted $9.19 billion in services revenue over the course of its second fiscal quarter of 2018, a figure up 31 percent year-over-year. The massive uptick doubles services revenue recorded just four years ago.
Apple now has a customer base of more than 250 million paid subscriptions across its Services offerings of Apple Music, iCloud and App Store continuing payments. Viewed against Amazon's recent announcement of 100 million Prime members, that figure is substantial. But Apple is also adding around 30 million new subscriptions every quarter.
An analyst predicts that Apple Music's dramatic growth over the next three years will be another major factor driving services revenue upward, but may push down overall margins.
As part of folding the Texture "Netflix for magazines" service into its own products, Apple appears poised to fire up a premium subscription offering integrating curated news to continue to grow services revenue.
Apple may not be reliant on massive seasonal sales of the iPhone going forward for steady revenue growth, if a new analyst report is accurate.
Apple's services business is booming, and it could serve to offset reported softness in demand for the iPhone X, as well as smooth out the valleys in seasonal earnings drops expected to arrive this quarter.
With Tuesday's earnings report, Apple has officially met its projections of its services alone being the equivalent to a Fortune 100 company.
A bill currently on the table which would require electronics companies to sell replacement parts and service tools to the general public is being challenged by a lobbyist group being funded by Apple.
Last year, Apple Chief Executive Tim Cook suggested the company's "Services" business could grow to the size of a Fortune 100 company within 2017. After the company's second fiscal quarter of 2017, Apple's steadily growing Services business — encompassing Apple Music, the App Store and more — is well on the way to matching Cook's prediction.
In a strong second fiscal quarter performance, both services and the "other" categories stand out, with 18 percent and 31 percent growth versus 2016, respectively.
Geographic app store estimates spanning multiple companies and platforms suggest that Apple's App Store, buoyed by growth beyond just games, is the top individual seller by company in China, but not by platform.
Apple's stock price on Tuesday hit a new record of $143.80, eclipsing the $1,000 per share pre-split benchmark, and if it keeps pace for the rest of the week will beat the company's old market capitalization record.
Wall Street forecasts for Apple stock are climbing, with another report claiming that the stock will hit $155 over the summer of 2017 on pre-release hype of the "iPhone 8" and continued expansion of the Services division that includes the App Store, Apple Music, and AppleCare.
Apple's stock price on Wednesday afternoon broke $140 per share and is only a few dollars short of both a pre-split $1000 valuation and breaking the company's previous market capitalization record of $774.69 billion set in 2015.
At the close of the market on Monday, Apple hit an all-time high of $133.29, breaking the previous record set on May 22, 2015, with market capitalization again flirting with $700 billion.
Apple's Services earnings aren't being considered strongly enough by investors, one analyst believes, arguing that if the business was properly weighted, the stock company's stock would be at least 10 percent higher than it currently sits.
The encompassing "Services" business has proven to be a reliable source of income growth for Apple, but its tremendous performance — accomplished during an overall company sales decline — can be difficult to visualize. AppleInsider offers a closer look at the booming segment Apple believes will double over the next four years.
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Stephen Silver
Daniel Eran Dilger
Mike Wuerthele
Malcolm Owen
