uploads///Apple services

How Apple Could Grow despite Slow iPhone Sales

By

Updated

Apple’s iPhone sales have been stagnating

Apple’s (AAPL) stagnating iPhone shipments have the potential to create an issue for the company. However, the company may not have hit its peak yet, according to Morgan Stanley.

Morgan Stanley analyst Katy Huberty thinks that the tech giant’s services and other products such as Apple Watch could be the main drivers of the company’s revenues over the next five years. Apple’s Services segment includes the App Store, Apple Music, and Apple Pay. Apple’s Services segment has seen robust growth over the last few years.

Article continues below advertisement

Apple’s Services segment could represent the next bout of growth

Apple’s Services segment generated $30.0 billion in revenues in fiscal 2017,[1. fiscal 2017 ended September 2017] which is almost double the revenues it generated in fiscal 2013. Huberty identified a growth opportunity for the tech juggernaut in Apple Pay, Apple Music, and its iCloud business. Huberty noted that while Apple Music has grown considerably, only 2.9% of iPhone owners use it, suggesting room for growth in this segment.

In 2017, Apple noted that it plans to invest $1.0 billion in original content. While the company hasn’t disclosed how it will distribute the content, it could become another source of income for the company.

Advertisement

More From Market Realist