Apple has announced that its revenue was up 6% year over year to nearly $95 billion USD, except for its Apple’s Services business.
👉 Background: Apple is the tech company worth $3.4 trillion USD, which is roughly the same as the annual GDP of India - a country with nearly 1.5 billion people.
👉 What happened: Apple has announced that its revenue was up 6% year over year to nearly $95 billion USD, with its overall iPhone revenue also up 6% - clearly iPhone nerds are queueing up.
👉 What else: Despite these results, Apple’s Services business, which includes iCloud and the App Store generated nearly $25 billion USD, but is facing some big challenges. Especially as Disney has joined Netflix and Spotify in skipping the App Store and Apple's 30% commission for its new subscriptions.
💡Not all revenue streams are created equally. Despite iPhone sales growth, Apple investors are more attracted to its Services division because of its tasty margins.
💡In fact, Apple’s quarterly gross margin for its Services business was 74% — almost double the 40% margin for all of Apple’s hardware products.
💡But as companies like Netflix and Disney funnel users elsewhere, Apple’s Services revenue has slowed - in fact, its services revenue was behind its forecast.
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