Apple's services business continues monster growth, revenues up 31 percent in record-break...

Posted:
in General Discussion
Apple posted $9.19 billion in services revenue over the course of its second fiscal quarter of 2018, a figure up 31 percent year-over-year. The massive uptick doubles services revenue recorded just four years ago.




The huge jump in services revenue helped fuel Apple's best March quarter ever, and again bucked normal seasonality trends to become the company's only segment to show growth on a sequential basis.

The $9.19 billion number, up from last year's $7 billion, marked the 12th consecutive quarter of double-digit, year-over-year services revenue growth. It also outperformed analyst expectations that services would reach $8.5 billion.

Breaking records




"Q2 was our best quarter ever for services," Tim Cook said during an earnings conference call. "And the momentum there continues to be incredibly strong."

"We had all time record revenue from the App Store, from Apple Music, from iCloud, from Apple Pay and more -- all of which are a powerful illustration of the importance of our huge active installed base of devices and the loyalty and engagement of our customers," he added.

The services category includes Digital Content and Services, AppleCare, Apple Pay, licensing and other services, including iTunes, the App Store, AppleMusic and iCloud.

"Across all our services, paid subscriptions surpassed 270 million, up over 100 million from a year ago and up 30 million in the last 90 days alone, contributing to the overall increase in services revenue," Cook said.

Apple Pay, Cook added, doubled active users and tripled transactions year-over-year, driven by expanded transit access in some Chinese and Japanese markets. Norway, Poland and Ukraine will get Apple Pay next.

Comments

  • Reply 1 of 15
    SpamSandwichSpamSandwich Posts: 29,217member
    All in all, a good show today.
    crossladwatto_cobraabhinav1215
  • Reply 2 of 15
    stevenozstevenoz Posts: 193member
      
    As with so much in life:

    Pay for quality or get what you pay for.  Evidently people are still paying for Apple quality.

    Can Apple improve? Oh yeah... definitely. Don't even get me started... but they're better than the rest, IMHO.

    Kudos to Tim Cook and company for continuing Steve Jobs' vision for us Apple Guys.




    gilly017cornchipcrossladchasmbb-15adm1netmagelostkiwiwatto_cobra
  • Reply 3 of 15
    retrogustoretrogusto Posts: 634member
    I wonder what is more profitable—Apple’s services division or Amazon (the entire company). Amazon made about $1.6Bn in their latest quarter, which is very good for them, but if Apple’s margins on services are at least half as good as they are for the company as a whole, they are making more with services. 
    StrangeDayslostkiwiwatto_cobra
  • Reply 4 of 15
    vanfrunikenvanfruniken Posts: 251member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.
    steveau
  • Reply 5 of 15
    Rayz2016Rayz2016 Posts: 3,597member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.
    Or you could just buy a PC. 
    GeorgeBMacmacxpress
  • Reply 6 of 15
    bestkeptsecretbestkeptsecret Posts: 2,746member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    SpamSandwichwatto_cobra
  • Reply 7 of 15
    I wonder what is more profitable—Apple’s services division or Amazon (the entire company). Amazon made about $1.6Bn in their latest quarter, which is very good for them, but if Apple’s margins on services are at least half as good as they are for the company as a whole, they are making more with services. 
    Both companies are pursuing different strategies. Amazon is investing in revenue growth - 43% last quarter - while Apple goes after steady revenue growth at high profit margins.
  • Reply 8 of 15
    GeorgeBMacGeorgeBMac Posts: 2,242member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.
    watto_cobra
  • Reply 9 of 15
    boboliciousbobolicious Posts: 345member
    Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    Would off the shelf 'mom + pop' storage and ram, designed in a format that could be user interchangeable allow lower & more cost flexibility ? One can get a 1TB SSD (albeit slower) aftermarket for a fraction of what Apple charges, and that must be done upfront of the total hardware lifecycle of course. PCIe® Gen 3 M2 are also available for less at whopping full speeds and capacities for future repurposing of machines...

    Additionally such things as the touch bar keyboard have no opt out with a discrete graphics macbook pro, yet the feature is unavailable on the pro, imac pro or others. How much cost does that build into a macbook pro, take it or leave it... ?

    Would an article or analysis on this be of interest to readers...?

    edited May 2
  • Reply 10 of 15
    netmagenetmage Posts: 181member

    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.


    I don't see how anyone could use the iPad as a serious development environment. I develop with dual 31" monitors, and I'm sure most developers have at least dual monitors even if only 24".
    watto_cobra
  • Reply 11 of 15
    macxpressmacxpress Posts: 4,341member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.
    So the T1 & T2 chips are off the shelf parts? The Apple designed TCON chip in the 27" iMac that runs the Retina display is an off the shelf part? I believe this TCON chip is also used on the new MacBook Pro. Yes, Apple is using Intel CPU's and AMD GPU's, but thats about as far as it goes for "off the shelf parts". Plus, you're forgetting about the custom cooling designs and things like that. Plus, you also are getting macOS, iMovie, GarageBand, iCloud services, etc. These are free, but are all factored into the price of an Apple product, including a Mac. These apps and services are not free for Apple to develop, deploy, and maintain. 

    Simply put, you cannot make the quality of products Apple produces and have a low price. I've said this many times. It just doesn't work. A lot of work goes into designing a Mac. Its not just a bunch of "off the shelf" parts slapped together in a fancy box. Apple is not in a race to the bottom. If you, yourself cannot afford a new Mac today, that doesn't mean Apple needs to produce cheaper Macs and don't start this BS that if prices were lower they would sell more. I'm tired of hearing this and its not always true. Its just a fantasy many have that cheaper means more. 

    If you want a cheap computer, then go buy a cheap PC, or buy the off the shelf parts (the same ones Apple apparently uses) and build your own. 
    edited May 2 watto_cobra
  • Reply 12 of 15
    jcs2305jcs2305 Posts: 389member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.
    Base model Macbook pro starts @ $1249.00 usd.. not $12,049.00. I would hardly call $1249.00 pricing for the well off only?  If you can't finance that amount or it seems way out of your league than you should be thinking refurbished or used for yourself.  Not that the company should compromise it's quality just to get something cheap out there for you to buy..which is essentially what you are saying.  In your opinion Apple sells off the shelf parts and overcharges for it's name with their machines, so they can easily drop the prices if they wanted to. right? 
    watto_cobra
  • Reply 13 of 15
    GeorgeBMacGeorgeBMac Posts: 2,242member
    macxpress said:
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.
    So the T1 & T2 chips are off the shelf parts? The Apple designed TCON chip in the 27" iMac that runs the Retina display is an off the shelf part? I believe this TCON chip is also used on the new MacBook Pro. Yes, Apple is using Intel CPU's and AMD GPU's, but thats about as far as it goes for "off the shelf parts". Plus, you're forgetting about the custom cooling designs and things like that. Plus, you also are getting macOS, iMovie, GarageBand, iCloud services, etc. These are free, but are all factored into the price of an Apple product, including a Mac. These apps and services are not free for Apple to develop, deploy, and maintain. 

    Simply put, you cannot make the quality of products Apple produces and have a low price. I've said this many times. It just doesn't work. A lot of work goes into designing a Mac. Its not just a bunch of "off the shelf" parts slapped together in a fancy box. Apple is not in a race to the bottom. If you, yourself cannot afford a new Mac today, that doesn't mean Apple needs to produce cheaper Macs and don't start this BS that if prices were lower they would sell more. I'm tired of hearing this and its not always true. Its just a fantasy many have that cheaper means more. 

    If you want a cheap computer, then go buy a cheap PC, or buy the off the shelf parts (the same ones Apple apparently uses) and build your own. 
    The Apple chips you mentioned are minor, basically frills.  
    The software you mentioned is part of the software and ecosystem that I pointed out separate Macs from the rest.  And, as I pointed out, the more they sell the lower the per unit cost goes.

    So, I think you confirmed my point more than anything else.   Sorry.
  • Reply 14 of 15
    bestkeptsecretbestkeptsecret Posts: 2,746member
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.


    The original poster mentioned that it would be a good time to "drastically drop" the Mac prices. My comment was that they wouldn't do that. It doesn't mean they cannot make a lower cost Mac.

    I understood the OP's comment as dropping the price drastically on the entire Mac line-up. I said that will not happen.

    watto_cobra
  • Reply 15 of 15
    GeorgeBMacGeorgeBMac Posts: 2,242member
    jcs2305 said:
    Now is a good time for Apple to drastically drop the Mac prices. After all the Mac has become an almost negligible part of Apple’s business, yet it plays a key role for developers. In particular, increased sales of Macbooks (especially to the STEM K12 segment, which will need "trucks" in the future*) would literally put other pc makers in a tight financial spot.
    To save face, Apple could make a few changes to "account" for the price drop, such as using an ARM processor. (And add at least one USB-C port).

    (*) alternatevily, Apple could make the iPad a serious development platform, which it isn’t right now. Kids (and others) should be able to develop stand-alone apps on the iPad. Sadly, Swift Playgrounds doesn’t offer that possibility (yet?). A decent enhancement of the "Files" system, allowing the organisation of dissimilar files and references (aliases don’t work for now) into projects is long overdue.


    I think your first point, about Apple dropping the price for Macs, is against the very grain of Apple. They will not do that.


    As for making the iPad a serious dev platform, I think they are working towards it. If one could design and develop iOS apps on the iPad, I think Apple will have a major victory.


    Side Note: I wonder if the sales of iPads will surge if MS brought Visual Studio and SQL Server to iOS.

    Why would you say Apple won't produce a lower cost Mac?
    The price spread in iPhones already spans 300%.  And, Macs are using off-the-shelf hardware available to most any mom & pop computer assembler -- which makes it even more possible to produce a lower cost Mac.

    What sets Macs apart is not their hardware but their software and their tie to the Apple ecosystem.   But, the cost (to Apple) of those things is fixed:  It costs Apple the same for a new version of MacOS whether they sell one or a billion.  So, effectively, every additional Mac they sell lowers the per unit costs of their software and ecosystem.

    I think we will start to see lower cost Macs in the near future.  They'll never be the cheapest, but neither will they be exclusively premium priced products that only the pros and well off can afford.
    Base model Macbook pro starts @ $1249.00 usd.. not $12,049.00. I would hardly call $1249.00 pricing for the well off only?  If you can't finance that amount or it seems way out of your league than you should be thinking refurbished or used for yourself.  Not that the company should compromise it's quality just to get something cheap out there for you to buy..which is essentially what you are saying.  In your opinion Apple sells off the shelf parts and overcharges for it's name with their machines, so they can easily drop the prices if they wanted to. right? 
    For a pro who needs what MBPs offer, $1,249 is not out of line.   For a normal schmo or college kid who can get the equivalent functionality for half that, it's a lot of money that could be spent elsewhere.

    True, the $600 Dell doesn't impress like an MBP, but neither does a Chevy.   But, for the average person using it to browse the web, email and such, or type a term paper, the $600 Dell more than meets their needs.

    As an aside, I watched the latest Q&A of the Fed President where the reporters are all at desks with their laptops.    These are pros who live and die by their laptop.  It MUST perform.   With a few exceptions, the room seems to be pretty evenly split between ThinkPads and MacBooks.


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