Apple's Services Revenue Expected to Top $100 Billion for First Time

[MacRumors]

Apple's services business is expected to hit $100 billion in annual revenue for the first time this year, reports the Financial Times.

Apple's services unit is expected to deliver annual revenues of $108.6 billion in the year to last month, which is up around 13 percent from the previous year. That's according to analysts' estimates at Visible Alpha.

If the estimates prove accurate when Apple reports its Q4 fiscal results this week, Apple's services division will be larger than the entire annual sales of Disney or Tesla this year. According to JPMorgan, services could make up a quarter of Apple's revenue but as much as 50 percent of its profit.

Apple's services business includes revenue generated from the App Store, iCloud, Apple Music, Apple TV+, Apple Arcade, AppleCare, and Apple Pay. It also benefits from Apple's multibillion-dollar deal with Google to make it the default search engine on Apple devices.

The report notes that the mammoth revenues of Apple's high-margin division come despite mounting legal and regulatory pressure on its App Store, both from a looming U.S. anti-competition case from the Justice Department and new regulations in Europe that could curtail its App Store fees of up to 30 percent on digital goods purchases.

Despite ongoing legal challenges, analysts expect services to account for a growing share of Apple's business in the coming years, driven in part by the company's media expansion into live sports – including its recent $700 million deal to stream Formula 1 races in the U.S.

According to Visible Alpha estimates, services could account for over 30 percent of Apple's total revenue by the end of the decade, with sales potentially reaching $175 billion. By comparison, the iPhone is projected to account for roughly half of Apple's estimated $415 billion in total revenue for fiscal 2025, with smartphone sales expected to grow about 4 percent.

Article Link: Apple's Services Revenue Expected to Top $100 Billion for First Time

 

[DBZmusicboy01]

Just wait until they put Ads on Apple Maps 😒

 

[davidec]

Apple is a decent company that’s come out with a relatively clean sheet after all these years. I don’t mind spending more on their services than I do on groceries!

 

[apparatchik]

I still don't understand why they don't do an Apple TV(+) / Apple Originals type of push for gaming, producing and financing AAA releases on day one across platforms, from Apple TV to Mac.

I don't think they're short on cash and nowadays Apple makes the most capable gaming hardware in terms of GPU perf in most form factors (handhelds, tablets, portable laptops, sff desktops and even set top boxes).

The M5 chip is beating dedicated more expensive gaming laptops like the Razer Blade 14, while costing less on emulated Windows games, let alone native ports.

 

[iDento]

I still don't understand why they don't do an Apple TV(+) / Apple Originals type of push for gaming, producing and financing AAA releases on day one across platforms, from Apple TV to Mac.

I don't think they're short on cash and nowadays Apple makes the most capable gaming hardware in terms of GPU perf in most form factors (handhelds, tablets, portable laptops, sff desktops and even set top boxes).

The M5 chip is beating dedicated more expensive gaming laptops like the Razor Blade 14, while costing less on emulated Windows games, let alone native ports.

The video games industry doesn’t work this way. Even Microsoft is losing to Japanese companies simply because they know how to make games, which isn’t simple at all, and money can’t fix it.

 

[Skyscraperfan]

All that money from the 30% fees is basically money they got by blackmailing their customers: "Pay us that fee or you can't install that app on your phone!". I can't understand that some people still defend that.

Imagine a car manufacturer demanded 30% of the revenue, if that car is used as a taxi.

 

[Apple-achian]

Just wait until they put Ads on Apple Maps 😒

They will create a Premium option for impatient users, relax.

 

[k1121j]

Thanks for all the added features that I don’t want or use, as an excuse to raise your prices. *Cough Apple Arcade

 

[boswald]

And the rich get richer...

 

[StuBeck]

I still don't understand why they don't do an Apple TV(+) / Apple Originals type of push for gaming, producing and financing AAA releases on day one across platforms, from Apple TV to Mac.

I don't think they're short on cash and nowadays Apple makes the most capable gaming hardware in terms of GPU perf in most form factors (handhelds, tablets, portable laptops, sff desktops and even set top boxes).

The M5 chip is beating dedicated more expensive gaming laptops like the Razer Blade 14, while costing less on emulated Windows games, let alone native ports.

Its more risky, more difficult, and wouldn't add much to their bottom line. Its a lot easier to get 30% from someone selling a $100 million game then to make your own game. Microsoft is trying to get to a 30% profit margin, something Apple started with, and is getting crapped on by people for putting profits above everything else.

 

[apparatchik]

The video games industry doesn’t work this way. Even Microsoft is losing to Japanese companies simply because they know how to make games, which isn’t simple at all, and money can’t fix it.

Yeah but a good chunk of this 100B in service revenue for Apple are actually games, which makes the App Store the largest videogame store front in the world (and indirectly, it makes Apple the largest videogame-related company as well).

The reason I mentioned Apple TV(+) is that Apple don't seem to mind loosing money there because it brings attached benefits.

They could have a properly scaled Apple Game Studios division and deals to bring AAA releases on day one as a loss leader so to speak, though I don't think they'd loose anyoney.

Unlike MS, they don't have to release a console, they have the hardware nailed down already.

 

[cardfan]

They did get me with the applecare multiple devices thing. Only because i got the avp. But no other subs but itunes cloud.

 

[lapstags]

Development fees are most of the services. Apples actual services are mediocre. Apple Arcade and Apple TV are not successes. They need to. Up their game on both fronts

 

[cardfan]

Development fees are most of the services. Apples actual services are mediocre. Apple Arcade and Apple TV are not successes. They need to. Up their game on both fronts

Yep. Services for Apple is applecare, google, and the 30% stuff. News, arcade, atv, not so much and I'd say atv is probably by itself a loser but maybe it drives subs to other streaming channels in that app so who knows how they measure its success. I actually like apple music and that's part of their dna so i'll leave that alone.

I remember reading how they wanted to eventually charge for apple intelligence. lol

 

[lapstags]

I still don't understand why they don't do an Apple TV(+) / Apple Originals type of push for gaming, producing and financing AAA releases on day one across platforms, from Apple TV to Mac.

I don't think they're short on cash and nowadays Apple makes the most capable gaming hardware in terms of GPU perf in most form factors (handhelds, tablets, portable laptops, sff desktops and even set top boxes).

The M5 chip is beating dedicated more expensive gaming laptops like the Razer Blade 14, while costing less on emulated Windows games, let alone native ports.

I think the hardware and metal framework are only now getting mature enough in the Apple silicon era to make it happen. Now with m4 and m5 combined with metal 4 they can have AAA titles on iPad which will open up a larger market than Mac. I expect to see cyberpunk, assassins creed shadows and control to all come to iPad soon.

 

[carlsson]

All that money from the 30% fees is basically money they got by blackmailing their customers: "Pay us that fee or you can't install that app on your phone!". I can't understand that some people still defend that.

Imagine a car manufacturer demanded 30% of the revenue, if that car is used as a taxi.

Imagine a store that sells things for more than it buys them! 😱

 

[I7guy]

All that money from the 30% fees is basically money they got by blackmailing their customers: "Pay us that fee or you can't install that app on your phone!". I can't understand that some people still defend that.

Imagine a car manufacturer demanded 30% of the revenue, if that car is used as a taxi.

Honest question. Why do you care? Is it making your iPhone usage more expensive or are you opposed to this because of some inner principles? Why people defend this is because apple isn’t the only game in town.

And about those car manufacturers shaking people down, like charging the customer to use the heated seats after they were originally installed in the car? Nah.

 

[I7guy]

[…]

I remember reading how they wanted to eventually charge for apple intelligence. lol

Pretty funny considering ChatGPT and copilot a Gemini are all “free”.

 

[Skyscraperfan]

Honest question. Why do you care? Is it making your iPhone usage more expensive or are you opposed to this because of some inner principles? Why people defend this is because apple isn’t the only game in town.

Americans will never understand the concept of consumer protection. Right now you can choose between iOS and its gated community and Android, which collects user data. So it is the job of the autorities to stop both.

 

[Boeingfan]

I don’t like this pathway. I’m not a fan of ads, nor subscriptions. I remember when Jetstar started flying in Australia with 717’s they allowed advertising on the overhead bins. It was so crass and on the nose. If an advertiser wants us to watch ads, pay us for it, not Apple!

 

[Boeingfan]

Just wait until they put Ads on Apple Maps 😒

I wonder if drivers will be asked to pull over every time there’s an ad to so that they can pay attention to the ad?

 

[AAPLbuyback]

Americans will never understand the concept of consumer protection. Right now you can choose between iOS and its gated community and Android, which collects user data. So it is the job of the autorities to stop both.

And you will never understand the concept of freedom.

 

[mrochester]

Americans will never understand the concept of consumer protection. Right now you can choose between iOS and its gated community and Android, which collects user data. So it is the job of the autorities to stop both.

Quick question, why shouldn't consumers be able to pick between those 2 things?

 

[I7guy]

Americans will never understand the concept of consumer protection. Right now you can choose between iOS and its gated community and Android, which collects user data. So it is the job of the autorities to stop both.

I guess the flip side is people outside of America expect the government endlessly regulate and to do what the market should be doing.

 

[satchmo]

Tim is so damn cheap. At the very least, give us 5GB free storage per device.