{"id":339898,"date":"2017-05-03T05:06:23","date_gmt":"2017-05-02T21:06:23","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1484475"},"modified":"2017-05-03T05:06:23","modified_gmt":"2017-05-02T21:06:23","slug":"apples-services-business-grows-18-as-iphone-sales-stall","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/apples-services-business-grows-18-as-iphone-sales-stall\/","title":{"rendered":"Apple\u2019s services business grows 18% as iPhone sales stall"},"content":{"rendered":"

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Apple just announced their earnings for Q1 2017. The company\u00a0reported $52.9B in revenue with EPS of $2.10, which slightly beat consensus estimates of $2.02.<\/p>\n

But perhaps more importantly, this\u00a0quarter\u2019s revenue from services was $7.04B, which represents\u00a018% growth year-over-year for the category, the same YOY growth percentage seen last quarter.<\/p>\n

And while revenue from services last quarter was a little better\u00a0at $7.17B, this is mainly due to the large sales bump Apple gets from the holiday season. In fact, revenue from services this quarter is only -2% compared to last quarter, which is insane when you consider that revenue from iPhone sales this quarter are -39% compared to last quarter.<\/p>\n

Essentially services are a category where revenue can stay relatively stable quarter to quarter even when hardware revenue falls dramatically, which is something that excites Wall Street.<\/p>\n

Services\u00a0are also playing a bigger role than ever when it comes to Apple\u2019s bottom line. Last quarter revenue from services consisted of 13.3% of Apple\u2019s total revenue. This is a nice\u00a0bump from the year-ago quarter, where services accounted for 11.8% of total revenue.<\/p>\n

While this 13.3% of total revenue only\u00a0comprises a small portion of Apple\u2019s overall revenue, it\u2019s a product category that many investors are paying close attention to.<\/p>\n

This is because it\u2019s a way for the company to continue growing top line revenue even if hardware sales are stalling, by monetizing services running on hardware that\u00a0the company\u2019s already sold.<\/p>\n

These services include things the App Store, iTunes Store, Apple Music Subscriptions, Apple Pay, iCloud Storage Costs, AppleCare and more.<\/p>\n

Essentially instead of generating revenue from a customer every two years when they buy a new phone, Apple wants to\u00a0be in a position to make\u00a0money from them every single month, regardless if they buy a new hardware device or not.<\/p>\n

Plus,\u00a0a lot of Apple\u2019s services offerings are re-occurring, like Apple Music, iCloud Storage and to an extend, Apple Pay. This means the company can expect to generate monthly revenue indefinitely\u00a0from all users who are subscribed to these services, which is something that Wall Street loves.<\/p>\n

Of course other services like the App Store still generate tons of revenue on a consistent basis\u00a0for\u00a0Apple, even if it isn\u2019t\u00a0technically reoccurring. In December alone of last quarter the App Store saw $3B in purchases<\/a>, making it the best month ever for the store.<\/p>\n

Featured Image: TechCrunch<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" Apple just announced their earnings for Q1 2017. The company\u00a0reported $52.9B in revenue with EPS of $2.10, which slightly beat consensus estimates of $2.02. But perhaps more importantly, this\u00a0quarter’s revenue from services was $7.04B, which represents\u00a018% growth year-over-year for the category, the same YOY growth percentage seen last quarter. And while revenue from services last… Read More<\/a><\/p>\n

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