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Apple's services category, which includes the App Store, Mac App Store, Apple Music, Apple Pay, AppleCare, Apple TV+, Apple Arcade, Apple News+, Apple Fitness, and more, saw significant growth in the first fiscal quarter of 2021 (fourth calendar quarter of 2020).

appleservices.jpg

According to Apple's latest earnings report, the services segment brought in $15.8 billion, up from $12.7 billion in the year-ago quarter.

Apple now has more than 620 million paying subscribers, reaching a goal that it set to have 600 million by the end of 2020. The App Store, iCloud services, Apple Music, AppleCare and payment services all saw all-time revenue records, with new services like Apple TV+, Apple Arcade, Apple News+, Apple Card, Apple Fitness+ and Apple One also contributing to services growth, as has Apple Pay. Apple Pay is now accepted at 90 percent of retail locations in the U.S.

Across 2020, the App Store grossed more than $64 billion according to a recent report from CNBC. That's up from an estimated $50 billion in 2019. Apple does not confirm App Store sales number, but Apple earlier this month said that $200 billion has been paid out to developers since 2008, a figure that's up $45 billion from the numbers provided in January 2020.

Late in 2020, Apple introduced its Apple One services bundles that pair up services like Apple Music‌, ‌Apple Arcade‌, and ‌Apple TV+‌ at reduced prices, and it unveiled Apple Fitness+, a $9.99 per month service that provides guided home workout options to Apple Watch owners.

Article Link: Apple's Services Revenue Hits All-Time High of $15.8B Billion in Q1 2021
 
Last edited:

jmgregory1

macrumors 68030
I was going to say on the overall revenue increase article, that services and their new Apple One was going to add significantly to their revenue increases. I’m sure I’m not alone, in springing for the Premier tier, since it was just $5 more per month than I was paying, and for that I get Apple TV+, News+ and Fitness+, none of which I was paying for previously.
 
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Baymowe335

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Oct 6, 2017
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Services were up almost 25%.This is unbelievable.

Don’t be fooled by the relatively small piece of the pie, as hardware revenue is exaggerated during the Christmas quarter.

Services are a massive business with huge margins. Well done.
 
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freedomlinux

macrumors member
Jul 27, 2008
75
128
CT, USA
I'd really like to see a more detailed breakdown across the "services".

Combining stuff like AppleCare, which has a per-unit cost to provide service, and platforms like Apple TV+ where there are (generally) little incremental costs to serve additional users, it not incredibly useful.
 
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az431

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Sep 13, 2008
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Portland, OR
I'd really like to see a more detailed breakdown across the "services".

Combining stuff like AppleCare, which has a per-unit cost to provide service, and platforms like Apple TV+ where there are (generally) little incremental costs to serve additional users, it not incredibly useful.
What’s the difference? It’s $16 billion.
 
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MacGizmo

macrumors 68000
Apr 27, 2003
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Apple Pay is now accepted at 90 percent of retail locations in the U.S.
I find this very, very, VERY difficult to believe. I live in one of the largest cities in the U.S. and I'm hard-pressed to find more than a handful or two of companies that accept Apple Pay.

I'd really like to see a more detailed breakdown across the "services".
They'll never tell us, because Google accounts for the vast majority of that $16 billion... like, close to $12 billion, to be the default search engine.
 
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iFan

macrumors regular
Jan 3, 2007
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I find this very, very, VERY difficult to believe. I live in one of the largest cities in the U.S. and I'm hard-pressed to find more than a handful or two of companies that accept Apple Pay.


They'll never tell us, because Google accounts for the vast majority of that $16 billion... like, close to $12 billion, to be the default search engine.
Apple Pay is essentially available anywhere that you see contactless availability. Look closer and you'll see way more than a few companies accepting it. Even my local hot dog shop accepts it now.

Also: you're confusing Google's annual payment with quarterly revenue. Services revenue this year will be close to $60 billion whereas the Google payment is estimated to be ~$12 billion, as you wrote.
 
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MacGizmo

macrumors 68000
Apr 27, 2003
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Of course you're correct. I got my quarters and years discombobulated... but my actual point (which wasn't clear) was that Google accounts for a huge chunk of Services revenue - and Apple doesn't really want to draw attention to that fact for several reasons, not the least of which is drawing the ire of Congress.

As far as the contactless payment availability, I know it doesn't necessarily have to say "Apple Pay" on the device in order to actually use Apple Pay. The problem is that I've found so many companies that don't accept any contactless payment (Lowe's comes to mind). So many gas stations and grocery stores still don't accept Apple Pay, Walmart is still stuck on their own payment system as well, so I'm forced to carry a card anyway.
 
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freedomlinux

macrumors member
Jul 27, 2008
75
128
CT, USA
What’s the difference? It’s $16 billion.
My opinion is that $16b is large enough to break into specific categories, to help us understand what is really going on.

  1. The services have different margins (AppleCare vs Music vs TV+) and operating models.
  2. Different services have different adoption and are at different parts of their lifecycle.
  3. Different services exist in different competitive landscapes (Music vs Spotify, Fitness+ vs Peloton, TV+ vs Netflix, AppleCare vs SquareTrade(?))
  4. Using promotions or bundles (ex: Apple One) to hide underperforming services (ex: TV+).
 
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MJaP

macrumors regular
Mar 14, 2015
158
455
Apple's hardware is now merely a gateway to get you tied into their apps and services. If Apple are ever forced to open up their app market place to 3rd parties they're going to be in a lot of trouble until they can regroup and refocus.
 
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Glideslope

macrumors 604
Dec 7, 2007
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The Adirondacks.
Services were up almost 25%.This is unbelievable.

Don’t be fooled by the relatively small piece of the pie, as hardware revenue is exaggerated during the Christmas quarter.

Services are a massive business with huge margins. Well done.

Just curious what you think their margins are on Services? I'm thinking between 55-65%. Any thoughts?
 
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UrbanJoe1

macrumors regular
Jul 28, 2020
108
51
Great headline for today... Sustainability?
Elon Musk?
Donald Trump?
Time will tell. I miss Steve
 
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spazzcat

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Jun 29, 2007
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That is a huge increase from last year. It will be interesting to see how Fitness+ adds to the equation this time next year.
They really need to ramp this up, I would love to see them buy a company like Les Mills or Beachbody.
 
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MisterK

macrumors 6502
Jan 9, 2006
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Ottawa, Canada
This is a great and growing revenue stream for Apple and the AppleOne subscription was a very savvy move. I wonder what they'll be able to add to their service offerings next. The low hanging fruit has been picked, it seems.
 
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MacBH928

Contributor
May 17, 2008
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Apple Pay is essentially available anywhere that you see contactless availability. Look closer and you'll see way more than a few companies accepting it. Even my local hot dog shop accepts it now.

Do the shop has to set up an Apple account to accept the cards or will it work where ever there is a contactless machine? As in If I travel to Madagascar and there is a contactless machine there, will Apple pay work?
 
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