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.Tag: Financial TimesThis article, “Apple’s Services Revenue Expected to Top $100 Billion for First Time” first appeared on MacRumors.comDiscuss this article in our forums
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Author: Tim Hardwick