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Apple’s Other Products Segment: Why It’s Gaining Traction

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Strong performance in fiscal 2Q17

As you can see in the graph below, Apple’s (AAPL) Other Products segment revenue rose 31.0% YoY (year-over-year) to $2.9 billion in fiscal 2Q17, from $2.2 billion in fiscal 2Q16. Earlier in this series, we saw that Apple’s Services segment rose 18.0% YoY in fiscal 2Q17 to $7.0 billion.

Apple’s Services segment consists of iTunes, App Store, AppleCare, Apple Music, iCloud, and Apple Pay. Its Other Products segment consists of Apple Watch, iPod, Beats products, AirPod, and third-party accessories.

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In the earnings call, Apple’s CEO (chief executive officer) Tim Cook stated that revenue generated from AirPods, Apple Watch, and Beats headphones together would match the revenue of a Fortune 500 company. The Other Products segment accounted for 5.4% of revenue in fiscal 2Q17, compared to 5.1% in fiscal 1Q17 and 4.3% in fiscal 2Q16.

Apple Watch sales doubled in fiscal 2Q17

Although Apple didn’t release any official figures for Apple Watch revenues, it stated that sales doubled in fiscal 2Q17. Cook said, “Apple Watch is the best selling and most loved smartwatch in the world and we hear wonderful stories from our customers about its impact on our fitness and health.”

According to the results of Creative Strategy’s survey, AirPods have a customer satisfaction rating of 98.0% with demand significantly exceeding supply.

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