INSUBCONTINENT EXCLUSIVE:
We&ve known for a while now that Apple was going to be putting more of an emphasis on services
As the technical leaps from one iPhone/iPad/Mac generation to the next become less dramatic, product revenue has started to shrink; in
response, the company is focusing on driving forward on things like the App Store, iCloud, Apple Pay, Apple Music and its soon-to-launch
games and video offerings.
This shift is already playing out in the company financials
While product sales dipped a bit year-over-year — down from $51.3 billion in the quarter that ran from January to March 2018 to $46.6
billion in the same quarter of 2019 — revenue from the services business climbed from $9.9 billion to $11.5 billion.
In this fiscal Q2
quarter of 2018, Apple total revenue came in at roughly $61.1 billion; in the same quarter of 2019, it dipped to $58 billion
This works out to services accounting for 16.1% of Apple revenue in fiscal Q2 2018, but nearly 20% in fiscal Q2 2019
Apple CFO Luca Maestri says services now account for &one-third& of the company gross profits.
A big part of Apple services business is
monthly subscriptions — the things like iCloud, Apple Music and Apple News that make money each month from the hardware that already out
Tim Cook says Apple now has 390 million paid subscriptions across its services
Cook didn&t dive into how that breaks down service-by-service, but that up roughly 30 million subscribers over last quarter
The company says it expects paid subscribers to surpass half a billion by 2020 (presumably fueled by the launch of its gaming/video
