Apple's Services Revenue Up 24% on App Store, Apple Pay, and Apple Music Growth

[MacRumors]

During today's fourth quarter earnings call, Apple CEO Tim Cook highlighted the significant growth Apple saw in its services category, which is up 24 percent year over year.

In the quarter, Apple's services segment, which consists of the App Store, iTunes, Apple Music, Apple Pay, AppleCare, and more, brought in $6.3 billion, up from $5 billion in the year-ago quarter.

According to Cook, services growth is driven by continued increases in App Store revenue and the increasing popularity of Apple Music. Revenue from Apple Music was up 22 percent in Q4 2016 compared to Q4 2015, while the App Store saw its fifth consecutive quarter of growth.

Apple Pay is also seeing steady growth. Apple Pay transactions are up over 500 percent, and in September of 2016, Apple saw more Apple Pay transactions than across all of fiscal 2015.

All in all, Apple has nearly doubled services revenue in the last four years and expects the services category to reach the size of a Fortune 100 company in 2017.

Article Link: Apple's Services Revenue Up 24% on App Store, Apple Pay, and Apple Music Growth

 

[tmiw]

Too bad they don't list out Apple Pay growth by country and in-store vs. in-app.

 

[BMcCoy]

Remind me... what's Apple's cut in an Apple Pau transaction? What % is the credit card company taking..?.. Versus if I just used the contactless credit card directly.

 

[Jakexb]

I know I've been using Apple Pay a lot more ever since my physical card got the chip. The chip is crazy slow, slower than swiping was. It finally motivated me to change my habits and pull out my phone to pay instead.

 

[tmiw]

Remind me... what's Apple's cut in an Apple Pau transaction? What % is the credit card company taking..?.. Versus if I just used the contactless credit card directly.

Depends on the country. In the US, it's 0.15%.

 

[jayducharme]

There are only so many devices people can buy. When Apple was struggling in the 1990s, there was lots of room for growth. But for how many years can Apple keep selling 40 million iPhones? The move toward services has come at a perfect time. Their ecosystem is now large enough to support it. Providing content is just another piece of that.

 

[Max Portakabin]

Deserved growth: Apple Pay and the efficiencies offered during transactions

Not deserved: 20% hidden price increases across the board in iTMS and App Store.

On the fence: Apple Music - maybe offer up another trial for those who got burned at the car crash of the initial roll out.

 

[groovyd]

Doooomed

 

[twinlight]

Would be higher if they had teamed up with Visa or Mastercard directly. This slow rollout and resistence from banks is holding it back.

 

[Junior117]

Would be higher if they had teamed up with Visa or Mastercard directly. This slow rollout and resistence from banks is holding it back.

I don't know if that's possible for most countries. For example, in Canada, we can't directly get credit cards from either Visa or MasterCard from them. Instead, we have to get them from our bank. American Express is the only credit card company in Canada that does directly sell their cards to customers. (And I only know this because they keep calling me so they can offer me one of their cards. So annoying. -_-) So in the case of Apple bringing Apple Pay to Canada, they started out with American Express and worked their way from there.

Not saying that it's the same in the rest of the world, but it's certainly possible.

 

[twinlight]

They should open up their own virtual bank and issue 'cards' themselves then.

Think of all the money people would deposit to Apple. A huge percentage of their customers are well off and gladly use money.

I hope Amex comes out with Apple Pay in Norway so I can jump ship because all our banks have various digital wallets and apps and none of them is remotely interested in Apple Pay.

 

[AiWaddup]

I don't know if that's possible for most countries. For example, in Canada, we can't directly get credit cards from either Visa or MasterCard from them. Instead, we have to get them from our bank. American Express is the only credit card company in Canada that does directly sell their cards to customers. (And I only know this because they keep calling me so they can offer me one of their cards. So annoying. -_-) So in the case of Apple bringing Apple Pay to Canada, they started out with American Express and worked their way from there.

Not saying that it's the same in the rest of the world, but it's certainly possible.

You're right. MasterCard and VISA are card networks only, American Express is a card network and a bank all-in-one.

You can't get a MasterCard or VISA card directly from those companies, because there'd be no funds (or credit) to deduct from in the first place. MC and Visa only "settle" the transaction between the merchant bank and the customer bank.