Apple services, "Other" revenue sources impress with massive Q2 growth
In a strong second fiscal quarter performance, both services and the "other" categories stand out, with 18 percent and 31 percent growth versus 2016, respectively.
In an earnings report on Tuesday, Apple said services generated $7.04 billion, with other products generating $2.87 billion. While both numbers are down from the holiday quarter, a more meaningful comparison is to the same quarter in 2016, with the company pulling down $5.99 billion and $2.19 billion respectively.
Apple's Services category includes iTunes, iCloud, Apple Music, Apple Pay, Apple Care and the various App Stores. The company's Other category spans sales of Apple TV, Apple Watch, Beats products, iPod and Apple-branded, and third-party accessories.
Apple CEO Tim Cook noted on the earnings conference call after the results were announced that Apple's revenue from wearables, including the Apple Watch, Beats, and AirPods alone would qualify for Fortune 500 status, if broken out.
Echoing statements made three months ago, Cook reiterated that services is on track to become the size of a Fortune 100 company by the end of the year. The growth is also quite stable when compared against the growth rates of other parts of the company, with minimal seasonal variance.
It is likely Apple will continue to see consistent growth in services for quite some time, a belief shared by financial analysts. It is speculated revenue will grow 17 percent every year until 2021, with Ben Schachter of Macquarie Securities calling the App Store, a core component of Services, "one of the best business models ever created."
In an earnings report on Tuesday, Apple said services generated $7.04 billion, with other products generating $2.87 billion. While both numbers are down from the holiday quarter, a more meaningful comparison is to the same quarter in 2016, with the company pulling down $5.99 billion and $2.19 billion respectively.
Apple's Services category includes iTunes, iCloud, Apple Music, Apple Pay, Apple Care and the various App Stores. The company's Other category spans sales of Apple TV, Apple Watch, Beats products, iPod and Apple-branded, and third-party accessories.
Apple CEO Tim Cook noted on the earnings conference call after the results were announced that Apple's revenue from wearables, including the Apple Watch, Beats, and AirPods alone would qualify for Fortune 500 status, if broken out.
Echoing statements made three months ago, Cook reiterated that services is on track to become the size of a Fortune 100 company by the end of the year. The growth is also quite stable when compared against the growth rates of other parts of the company, with minimal seasonal variance.
It is likely Apple will continue to see consistent growth in services for quite some time, a belief shared by financial analysts. It is speculated revenue will grow 17 percent every year until 2021, with Ben Schachter of Macquarie Securities calling the App Store, a core component of Services, "one of the best business models ever created."
Comments
the Other category may be the new iPhone(in revenue).
Watch, Beats, AirPods these are mega hits like Tim said, Fortune 500 status.
I say Apple pull the big guns on the next Watch and completely take over the industry. Stand alone functions(no iPhone), biometric sensors(diabetes, alcohol levels, hydration), longer battery life, advanced fitness sensors(push ups, sit ups, jumping jacks).
Don't be surprised if this category jumps another %30+ after the next Watch release.
funny I see more Beats than ever now.
Apple watch outsold the iPod using the same timeframe.
How about this:
https://www.theguardian.com/technology/2016/sep/07/apple-airpods-launch-problems-with-wireless-headphones
http://forums1.appleinsider.com/discussion/comment/2880502/ post #9
http://forums.appleinsider.com/discussion/184022/apple-beats-top-other-brands-among-college-students-in-laptops-phones-tablets-and-headphones post #2
http://forums.appleinsider.com/discussion/190529/apples-new-smart-battery-case-displays-remaining-charge-on-lock-screen-boasts-integrated-antenna/p1 post #3
http://forums.appleinsider.com/discussion/190293/review-apple-goes-high-fashion-with-apple-watch-magnetic-charging-dock post #18
http://forums.appleinsider.com/discussion/191704/japan-apple-stores-roll-out-iphone-screen-protector-installation-service post #11
I could go on for a while...
I will say one thing is correct - Apple does get a ton more media coverage than most other companies - but most of it is through the lens of Apple is slipping, Apple has peaked, Apple's best days are behind it, etc. It might not be literally saying "Apple is doomed", but it is far from praise.
2015: Apple has sizeable iPhone growth due to the iPhone 6 "super cycle" => "Apple is too reliant on iPhone for growth..."
2016: iPhone declines in sales => "Apple too reliant on iPhone for revenue and it has peaked, Apple's best days are behind it..."
2017: iPhone revenue stabilizes, Services and Other begin to show strong growth, lessening iPhone reliance => "iPhone unit sales are down again..."
"shrugs"...
I've been noticing Beats pre-Apple for various reasons Since they launched. One reason being that I hate Monster Cable and another being I was hanging out with rappers/producers and engineers. Can you provide a link that shows Beats sales have plummeted and it's all an illusion??
Nice rant and attempt at advertising the knockoff but many articles and anti-Apple shills were claiming that Apple bought Beats "too late". Jimmy and Dre have wanted Apple to buy them out before their first product.
sorry buddy but Apple will always be the creative artsy one as long as they continue to lead the way.
Watch is a gigantic success. Where the hell have you been?? It's doing a lot better than the iPod which took years to reach Watch sales.
I also believe yearcone Watch sales broke all year one Apple product records.
Some recent ones :
Peter Thiel says 'age of Apple' at its endWe've reached – maybe passed – peak Apple: Why the narrative needs to change
IPhone Demand Drives Apple Profit, but Outlook Is Muted - The New York Times
"They only have 60 days left to either come up with something or they will disappear," said Trip Chowdhry, managing director at Global Equities Research. Time is ticking for Apple to announce an iWatch, say analysts
Some compilations :
Apple Death Knell Counter - The Mac ObserverThe Macalope Special Edition: Fools of the Year | Macworld
iPad Death Watch
7 Reasons Apple is More Doomed Than You Think
6 Reasons Apple Is Still More Doomed Than You Think
Apple doomed - Bing
And who could forget :
Was Mike Daisey right about Apple being doomed?Edited to remove huuuge ugly Header 2 format
That guy has to stop his bloody verbal diarrhoea. I find it very difficult to read his word salads. I don't try much either, cos, you know, it's freeper.