A Look at Apple’s Services Business Revenue Growth

Apple’s (AAPL) Services business segment is the company’s fastest-growing segment in the last two years. Revenues from Apple’s Services business rose 23% YoY (year-over-year) in fiscal 2017 to ~$3.0 billion. Its Services revenues rose 22.0% YoY to ~$24.4 billion in fiscal 2015. Comparatively, Apple’s revenues fell 8.0% YoY in fiscal 2016 and rose 6.0% YoY in fiscal 2017.

Apple Services is the company’s second-largest business segment and accounted for 13.1% of total revenue in fiscal 2017, up from 11.3% in fiscal 2016, and 8.5% in fiscal 2015. This vertical generates revenues from the App Store, Apple Music, Apple Pay, iTunes, and Apple Care.

This segment has helped Apple offset the revenue decline in its iPad segment. iPad revenues for Apple has fallen 7.0% YoY in fiscal 2017 to $19.2 billion and 11% YoY in fiscal 2016 to ~$20.6 billion.

Apple’s Services business is the company’s fastest-growing segment and has been its primary revenue driver in the last two years. Its Services business has passed the $7.0 billion revenue mark in the last four consecutive quarters and is as large as a Fortune 100 company. The Services segment’s annual revenues are comparable to that of social media giant Facebook (FB).

Analysts expect Apple’s Services revenues to double from $24.0 billion in fiscal 2016 to $50.0 billion by the end of fiscal 2020.