Apple Services Revenue Set to Surpass $100 Billion Milestone

Apple’s services division is on track to make corporate history. According to the Financial Times, the unit is expected to post over $100 billion in annual revenue for the first time. This landmark achievement is projected for the fiscal year ending September 2025.

Analysts at Visible Alpha estimate the revenue will hit $108.6 billion. This represents a significant 13 percent annual growth. The division is now a financial powerhouse in its own right.

A Financial Giant Compared to Industry Titans

The scale of this revenue is staggering. If estimates hold, Apple’s services business alone would be larger than the entire annual sales of Disney or Tesla. This highlights its immense contribution to Apple’s bottom line.

JPMorgan analysis provides further insight. Services could account for a quarter of Apple’s total revenue. More importantly, it may contribute up to half of the company’s total profit due to its high margins.

Driving Growth Amidst Regulatory Challenges

This growth comes despite significant legal pressures. The U.S. Justice Department is pursuing an anti-competition case. New European regulations also threaten to curtail lucrative App Store fees.

Yet, analysts remain bullish on the division’s future. They expect services to account for over 30 percent of total revenue by 2030. Sales could potentially reach $175 billion by the end of the decade.

The company’s push into live sports is a key growth driver. Its recent $700 million deal for Formula 1 streaming rights in the U.S. is a prime example. This expansion into media continues to diversify its revenue streams.

Apple services revenue has become the company’s second growth engine, fundamentally reshaping its financial profile and future strategy in an increasingly digital world.

Thought you’d like to know

What is included in Apple’s services revenue?

It includes income from the App Store, iCloud, Apple Music, and Apple TV+. Revenue from Apple Arcade, AppleCare, and Apple Pay is also part of this division.

How does this revenue compare to the iPhone?

The iPhone is still Apple’s largest product, projected to bring in about half of its $415 billion total revenue. However, services are growing at a much faster rate of about 13 percent annually.

Why is the services division so profitable?

Its high-profit margins are a major factor. According to JPMorgan, services could make up 50 percent of Apple’s profit while only accounting for a quarter of its total revenue.

What are the main risks to this business?

Legal and regulatory challenges pose the biggest threat. Ongoing antitrust cases and new laws in Europe could impact the fees Apple collects from its App Store.

How does the Google search deal factor in?

Apple’s multibillion-dollar agreement with Google is a significant contributor. This deal makes Google the default search engine on Apple devices, generating substantial revenue for Apple’s services division.

Trusted Sources

Financial Times, Reuters, Visible Alpha, JPMorgan