Apple announced that its services and services unit, which constitutes a large part of its annual revenue, has reached a revenue level of 100 billion dollars with incredible growth. The service unit, which has become the company’s largest source of income after the iPhone unit, made investors happy by increasing its income in this quarter as well.According to its last quarterly financial report, Apple announced that the revenue from its service unit reached approximately 25 billion dollars and recorded a growth of 12 percent on an annual basis. Apple CFO Luca Maestri described this achievement as “an important milestone” and emphasized that the unit generates annual revenue of $100 billion. Compared to a few years ago, this growth is “extraordinary,” Maestri said.
Apple’s service unit continues to print money
If Apple’s service unit were included in the Fortune 500 list of 500 largest companies in terms of revenue volume, it would rank 40th on its own, leaving giants such as Morgan Stanley and Johnson & Johnson behind.
Apple started reporting its revenue from services and services for the first time in the last quarter of 2014. The income generated at that time, which was at the level of 4.8 billion dollars at that time, exceeded the level of 25 billion dollars today, turning into a success story that attracted attention on Wall Street. The profit margins on the income generated here are also quite high; The service unit has a high gross profit margin of 74 percent, well above Apple’s overall profit margin of 46.2 percent.
Apple’s service unit; It consists of advertising, search license agreement with Google, AppleCare guarantees, iCloud cloud services, content subscriptions such as Apple TV +, Apple Pay and other subscriptions. The company aims to increase the revenue of this unit independently of device sales. Apple CEO Tim Cook states that the growth of this segment will progress with the company’s installed device base. Users who buy a new iPhone are thought to be more likely to sign up for one of Apple’s various subscription services.Apple also discloses a “subscription” figure that includes recurring payments through App Store apps, as well as its own services. Although the company reported that its installed device base and subscriptions reached record levels, it did not share current figures. Apple said it had 2.2 billion active devices in February and surpassed 1 billion paid subscriptions in August.
Cook said that they will continue to invest in services and add new features in the coming periods. Services such as Apple News+, Music, Arcade may be the first to be affected by innovations.
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