Apple has announced its earnings for the first Quarter of the year and has managed to beat estimates, though only marginally. However, the company registered a strong growth from the services department, which yielded a net Revenue of 7.04 Billion.
To put things in perspective, that revenue comes on a net revenue of $52.9 Billion. So, around 15 percent of Apple’s total revenue came from it services business. This also marked a year over year growth of 18 percent which interestingly, is the same growth percentage that was recorded in the last quarter.
True, Apple’s performance last quarter was a tad better as teh company managed sales of around $7.17 Billion. However, you have to take the holiday season into account that yielded a large percentage of Apple’s revenue. That the company has managed to cross the $7 Billion threshold yet again speaks volumes for the kind of growth that services has been witnessing of late.
To compare, services revenue in this quarter are down by merely 2 percent as compared to the last quarter. And we should remember that the last quarter of 2016 saw massive sales due to holiday season. I mean the App Store had its best month ever in December 2016, and managed to generate sales of $3 Billion in merely 30 days.
Compare it with iPhone revenue and it has registered a drop of around 39 percent. So, it would definitely appear like Apple is doing pretty well on the services front.
Services includes things like App Store, iTunes Store, Apple Music Subscriptions, Apple Pay, iCloud Storage Costs, AppleCare and so on. What is important here is that services generate money constantly. Unlike iPhone sales which boom up every time Apple launches a new device and then die down, services is something that can be a constant money spinner. Which is enough to explain why the Cupertino giant is so interested in growing the share this section has in its total revenue.