Apple's Services Revenue Up 19% Year-Over-Year in Q1 2019, Hits New All-Time High

[MacRumors]

Apple's services category, which includes iTunes, the App Store, the Mac App Store, Apple Music, Apple Pay, and AppleCare is an increasingly important revenue driver for Apple amid stagnating iPhone sales, and services growth is once again hitting an all time high.

During the first fiscal quarter of 2019, Apple's services segment brought in $10.9 billion in revenue, up from the $9.1 billion services earned in the first quarter of 2018.

In all five of its geographic regions, including China, Apple saw new December quarter revenues record for the services category.

Apple hit a December quarter record for AppleCare, and nearly 16 years after launching iTunes Store, it saw its highest quarterly revenue ever thanks to Apple Music. The App Store also saw record results propelled by record sales on Christmas and New Years.

Over 1.8 billion Apple Pay transactions were made during the quarter, 2x more than the previous quarter, and Apple News set a new record with more than 85M monthly active users.

Apple has more than 360 million paid subscribers across its services, an increase of 120 million compared to the year-ago quarter. Apple CFO Luca Maestri said that the company expects the total number of paid subscribers to surpass half a billion in 2020.

Apple is aiming to reach $14 billion in services revenue per quarter by 2020, and it is well on its way towards reaching that goal.

Apple is working on bolstering its services category in 2019, breaking into the television industry. Apple is has more than two dozen original television shows in the works right now, which will be distributed through a TV streaming service set to debut early in 2019.

An Apple News subscription service is also in the works and could come out around the same time, with Apple planning to offer access to magazines for a monthly fee, and there have been rumors Apple is considering a gaming subscription service as well.

Article Link: Apple's Services Revenue Up 19% Year-Over-Year in Q1 2019, Hits New All-Time High

 

[jonblatho]

It'll be interesting to see how Services growth changes, if at all, with the (at least) two new subscription services seemingly coming this spring.

 

[44267547]

To me, this is where the ‘real’ growth is. Services is a major contributor to Apple, with Apple Music, Apple Pay expanding continuously, iCloud services, and of course the App Store, etc. Obviously hardware is Apple’s focus, but services is on the rise for a very good reason, and has been the trend with their past few earning calls.

 

[Classie]

Services - the future!

 

[MrGuder]

So it’s not the end of the world for Apple? So much gloom and doom lately lol

 

[martyjmclean]

Let’s hope Apple doesn’t see this growth as “Services are perfect the way they are”. iCloud needs some serious catching up to Google Drive, the Stores backend needs rebuilding, Apple Music needs Spotify level algorithms and playlists, and not to mention Apple Pay Cash etc needs to be available outside the US.

 

[Hanson Eigilson]

yeah Apple is amazing with this stuff, now do you want a fistfull of gems, a pile of gems, a pouch of gems, a bucket of gems, a barrel of gems, a wagon of gems, a truck of gems, a tugboat of gems a containership of gems, a meteor of gems or just a giant ripoff economy ?

 

[FSMBP]

Gee I wonder why they haven’t upped their 5GB iCloud storage...not saying they should offer 30GB free, but 15GB is reasonable.

 

[dannyyankou]

Well yeah, as long as the cumulative number of active iOS devices increases, the services revenue will always increase.

 

[ipedro]

Think about it.

Apple Services in 2019 is worth more than the entire Apple company in 2009. This is before Apple even launches the TV service and Apple New subscription, both coming this year. Apple is branching into health, a trillion dollar market and ApplePay is spreading, financial services is also a trillion dollar market. Meanwhile, Apple Watch is growing exponentially, AirPods own 80% of the entire wireless earphone market and AR Glasses are launching next year.

Apple will be fine.

 

[tmiw]

How many of those 1.8 billion transactions were in the US? I've read elsewhere that it's only something like 10-15%, but that was a while ago.

 

[haruhiko]

The HomePod made me switch from Spotify to Apple Music. And currently I have a family iCloud plan.

 

[Scottsoapbox]

I wonder how much of this is Verizon paying for free Apple music for "unlimited" customers. #AccountingCanBeCreative

 

[fairuz]

I'm glad about this even though I bet against Apple. Apple is the most ethical I've seen of the large corps when it comes to services, and their stuff is nice and user-friendly.

Except for iCloud Notes. Why'd it have to go and delete all my local notes? Geez, kill that thing with fire.
[doublepost=1548820740][/doublepost]

Well yeah, as long as the cumulative number of active iOS devices increases, the services revenue will always increase.

This isn't a given. A few years ago, Spotify was dominating even on iPhones.

 

[Baymowe335]

360M paid subscribers is seriously an insane number.

 

[BigMcGuire]

Selective sync for iCloud! Please!

 

[pika2000]

And thus Apple need to do something more. I mean iCloud has not offered anything new or refreshing for a while. iWorks on iCloud don’t get mentioned in keynotes anymore. Instead, Apple is chasing Netflix, a model where there are actually a lot of capital involved (getting rights to the various movies and shows are not cheap). Why not beef up iCloud first to the point that Apple user won’t be interested in Office 365 at all.
[doublepost=1548827842][/doublepost]

Think about it.

Apple Services in 2019 is worth more than the entire Apple company in 2009. This is before Apple even launches the TV service and Apple New subscription, both coming this year. Apple is branching into health, a trillion dollar market and ApplePay is spreading, financial services is also a trillion dollar market. Meanwhile, Apple Watch is growing exponentially, AirPods own 80% of the entire wireless earphone market and AR Glasses are launching next year.

Apple will be fine.

But I want my $500 Mac Pro, iPad with mouse running Windows, and $200 iPhone XIII. So Apple is doomed, doomed I tell ya.
/s

 

[radus]

When customers do not buy iPhones anymore - services are senseless.
Without a phone that can compete to the new Androids, services are great but nobody uses it.

 

[laz232]

So it’s not the end of the world for Apple? So much gloom and doom lately lol

The point is that I don't care if a company with the name "Apple" exists* - I want that company to create tools (real computers - in my case laptops), that enable me to do my work (and play) in an as effective and enjoyable way as possible.
Music subscriptions and lame TV shows are not that company, nor are expensive phone, or watches or watch bands.

I think that is the reason that a lot of people are upset - we don't care if Apple makes a trillion dollars, if they are not creating the computers that got them to where they are in the first place - we would rather have a really good $100M company than a $100B behemoth that just markets crap to the masses.

*after all, the name IBM is still around too - they are no longer relevant for most people

 

[jayducharme]

Well yeah, as long as the cumulative number of active iOS devices increases, the services revenue will always increase.

Which is why we might see a moderation in their prices. If Cook knows high device pricing is a barrier to the adoption of Apple’s services (which have a much greater profit margin), it would make a lot of sense to have less expensive devices.

 

[truthertech]

Gee I wonder why they haven’t upped their 5GB iCloud storage...not saying they should offer 30GB free, but 15GB is reasonable.

They may increase it, but Apple knows it doesn't matter to the vast majority of people, as they will want a plan that offers more than 10-15 anyways, so most people are going to want to upgrade, so and 99cents for 50gb is a terrific deal. Besides, 10, 15, 30, the critics will always argue it's not enough.

 

[d0nK]

Balls to services.
I need a new mbp without the incredibly crap butterfly keyboard attached to it.
Chop, chop Apple.

 

[Romeo_Nightfall]

The point is that I don't care if a company with the name "Apple" exists* - I want that company to create tools (real computers - in my case laptops), that enable me to do my work (and play) in an as effective and enjoyable way as possible.
Music subscriptions and lame TV shows are not that company, nor are expensive phone, or watches or watch bands.

I think that is the reason that a lot of people are upset - we don't care if Apple makes a trillion dollars, if they are not creating the computers that got them to where they are in the first place - we would rather have a really good $100M company than a $100B behemoth that just markets crap to the masses.

*after all, the name IBM is still around too - they are no longer relevant for most people

Very good comment.
As an apple employee I would,ask myself. What am i doing here?
I mean there is 0 innovation , just a huge giant brand

I wonder how their employees even motivate themself every day

 

[truthertech]

Very good comment.
As an apple employee I would,ask myself. What am i doing here?
I mean there is 0 innovation , just a huge giant brand

I wonder how their employees even motivate themself every day

When Apple is spending over a billion dollars a month on R and D, more than most all of the companies in the entire world, Apple would be better off without any employees clueless as the one you describe.