Apple is reportedly planning to shift its revenue model
Apple (AAPL) has evolved several times over the decades to move with the times. The tech giant’s venture into smartphones about a decade back revolutionized the handsets space. Now, as its iPhone sales are shrinking, the company has been trying to ramp up its fast-growing Services segment. According to a recent report by the Wall Street Journal, Apple may soon move away from the iPhone as the core of its business.
Services are growing quickly but still make up a small portion of revenue
The Wall Street Journal points out that a good part of the company’s shift will be towards its Services unit. In the first quarter of 2019, which ended in December 2018, the Services segment generated revenue of $10.9 billion, a 19% YoY increase.
While this is a slowdown from previous quarters, the segment is still on course to generate $50 billion in 2020, which is the company’s goal. Soon, the company is expected to launch its own streaming service, which it has been working on for over a year.
After peaking at around $233.4 per share in October 2018 and crossing a market cap of a whopping $1.1 trillion, Apple’s stock slid by nearly 40%. The company has since rallied over 20% and briefly reclaimed its top position as the most valuable public company in the world. The stock is up 9% year-to-date.