Apple’s Services Segment: Now 2nd-Largest Revenue Producer



Revenue rose 18.0%

In fiscal 2Q17, revenue from Apple’s (AAPL) Services segment rose 18.0% YoY (year-over-year) to almost $7.0 billion, from $6.0 billion in fiscal 2Q16. The Services segment is now Apple’s second-largest revenue producer. It consists of revenue from iTunes, App Store, AppleCare, Apple Music, and Apple Pay.

Services revenue accounted for 14.1% of Apple’s total revenue in fiscal 3Q16, a rise from 10.1% in fiscal 3Q15. It accounted for 13.5% of total revenue in fiscal 4Q16, 9.2% in fiscal 1Q17, and 13.3% in fiscal 2Q17.

The Services segment surpassed $7.0 billion in revenue for the second consecutive quarter and is almost the size of a Fortune 100 company.

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App Store drove Services revenue in fiscal 2Q17

Revenue from the App Store rose 40.0% YoY (year-over-year) in fiscal 2Q17, which is an all-time high. Apple’s CEO (chief executive officer) Tim Cook said, “The number of developers offering apps for sale on our store was up 26% over last year, and we’re thrilled to see their success.”

Apple Music subscriptions saw double-digit YoY growth in fiscal 2Q17. Growth in the iCloud storage vertical also saw significant growth. Paid subscriptions for Apple’s services and third-party content are now well above 165.0 million subscribers.

Apple Pay is gaining traction after launching in Taiwan and Ireland in fiscal 2Q17. Apple Pay is available in 15 markets with more than 20.0 million locations accepting Apple’s digital payment service.


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