Apple’s Service Business Sprints Past $100B In Annual Revenue Amid Investor Concerns
Apple may be facing some challenges with its Vision and Intelligence, but it hasn’t lost its edge. Despite reports of weaker handset sales, the tech leviathan’s iPhone business — which makes up half of its revenue — showed signs of a rebound in its latest quarterly earnings, reported on Thursday. This contributed to a record quarterly profit, and Apple’s continued dominance in consumer hardware helped it surpass an unprecedented milestone.
- Apple’s services business — a standalone unit since 2014 that includes AppleCare, iCloud, and App Store — brought in nearly $25B in revenue for the quarter.
- Over the past twelve months, this unit has generated over $100B, making up more than a quarter of Apple’s quarterly revenue.
Mind on margin: Despite the biblical importance of the company’s iPhone sales, the services business continues to grow faster and serves as a more consistent revenue source. Services revenue rose 12% year-over-year for the quarter, with much of this growth contributing to Apple’s bottom line, thanks to high margins. In the period, the services unit’s gross margin was 74%, compared to the company’s overall margin of 46.2%. This services growth remains a powerful indicator of Apple’s overall health, proving resilient even when other areas face headwinds.
