LOL. Apple Services are phenomenally successful, having just brought in $13.35 BILLION in the last quarter alone from its services. The App Store, Apple Pay, Apple Music, iCloud, etc. As far as news, Apple News is by far the most popular news app in the entire world with over 100 Million monthly users.
That’s not what I want though. Many of those services can only used because they are extensions of the platforms. App Store is not a service on its own, it’s an extension of the iPhone. So is iCloud Drive. These services could not exist without the hardware platform. Nobody would pay for them - which android user would pay for iCloud Drive?
Music might the only one that has an ability to exist outside the Apple platform, that would have people pay for it whether having an Apple device or not.
What Apple calls services is somewhat misleading - many are not independent products but extensions of their hardware platform.
The majority of Apple's "Services" revenue comes from two places: AppleCare extended warranties and the ridiculous 30% App Store commission.
Apple News may have 100M monthly users, but it's free and available on every device. It's likely that many Apple News users (myself included) read an occasional story and that's counts towards the monthly user total. How many are paying for News+, though?
Apple lumps all of their "services" together, but including extended warranties and App Store commissions in the total completely skews the picture. Sure, these are "services", but they are directly dependent upon hardware sales as
@Mayanja notes. No hardware sale, no extended warranty sale. No hardware sale, no App Store commissions. Same goes for Apple Card and Apple Pay.
By all accounts the only stand-alone Apple service that is doing reasonably well is Music, but there is a lot of speculation around how much profit (if any) it generates. News+ is clearly a flop and TV+ hasn't caught on. Outside of Apple-centric websites, I haven't heard a single person mention a TV+ show. No show has generated any kind of meaningful buzz, be it word of mouth or in the press. Being the tech guy in my peer group, I help a lot of people with their (mostly) Apple devices. No one I know has watched anything on TV+, myself included. And no one subscribes to News+ either. Plenty use Apple Music, though.
Apple has done a very good job in recent years of shifting focus from (flat) unit sales to total dollars. Raising prices and further gouging customers has enabled them to keep those total dollar numbers up while unit sales stay flat or even decline. They've always made good money on Apple Care, but until "services" became the new Wall Street buzzword, they didn't really emphasize this aspect of their business. Now they lump all of this stuff together and analysts salivate over how their services business is a Fortune 100 (or whatever) business all by itself without acknowledging the fact that most of the revenue is directly tied to hardware sales.
Focusing on service revenue growth has kept Wall Street happy, but if you separate the extended warranty costs and App Store commissions from the rest, the picture changes dramatically and isn't nearly as impressive. Long story short, Apple is still a hardware company, and their success remains directly tied to hardware sales, regardless of how much focus analysts and Wall Street put on their services business.