Amid a record-breaking fiscal second quarter, Apple also delivered record-breaking services revenue up 17% year-over-year to reach $19.8 billion. The category — which includes businesses like the App Store, Apple TV+, Apple Music, cloud services, and others — also grew to reach 825 million paid subscriptions on Apple’s platform.
This figure is up more than 165 million in the last 12 months alone, Apple said.
The company highlighted a few of its recent achievements in the services category, including Apple TV+ becoming the first streaming service to win an Academy Award for Best Picture, for its movie “Coda.” Apple also noted its Apple TV+ shows had earned over 240 awards and more than 960 nominations to date.
The streaming service recently added live sports content with the addition of Friday Night Baseball, which launched earlier this month, along with other new titles.
In addition to setting an all-time revenue record in the services category, Apple set all-time records for the App Store, Apple Music, Apple Care, and cloud services, it said. Meanwhile, its video advertising and payment services set March quarter records.
During the last 12 months, Apple said it had generated $75 billion in services revenue.
“These impressive results reflect the impact of our continued investment in improving and expanding our services portfolio and the positive momentum that we’re seeing on many fronts,” noted Luca Maestri, Apple’s CFO.
I have attributed the growth to other factors as well, including Apple’s growing device install base, which also reached an all-time high across each geographic segment and major product category. Plus, Apple customers are increasingly engaging with the services Apple offers.
“We have more transacting accounts, more paying accounts, more accounts with subscriptions — the absolute amount of paid subscriptions on our platform is pretty impressive: 825 million. It’s an increase of 165 million in the last 12 months alone. So you can even tell that this is great growth,” said Maestri.
The company has also been adding new services over the last few years and plans to “add new services and new features,” he hinted.
While the majority of today’s Apple services are aimed at consumers, Apple said that it sees enterprise as a great opportunity going forward, following its recent launch of Apple Business Essentials, which was aimed more at the SMB market.
“But we know that enterprise, in general, as a market is a very interesting market for us, and we’re putting a lot of effort and focus on it. And we believe we have really good opportunities to grow,” said Maestri.
However, Apple did warn that while it expects services to continue to grow in double digits in the coming year, it does anticipate services growth to decelerate from its March quarter’s performance due to various factors including the supply chain constraints impacting Apple’s ability to ship enough products. to meet customer demand, foreign exchange rates, and the pausing of all sales in Russia, which took place in March.
The company said the growth rate for the June quarter is expected to be less than the 17% that it reported in March, as a result.