Since the companies inception in 1976, Apple have been held in high regard for their hardware. Woz produced revolutionary designs for motherboards and circuitry, and Steve was so obsessed with even the design of internal components that nothing left the company without achieving a certain level of design and engineering beauty.
The brand Apple sums up visions of iPods, Macintosh computers and more importantly iPhones. Although as the enormous growth of the iPhone slows, the revenue Apple gains from its services is going from strength to strength. Sure this is not new news, but in the week that has followed since the second quarter earnings call the real stories have been shadowed by a slight drop off in iPhone sales.
“Apple Pay is growing at a tremendous rate,” admitted Apple CEO Tim Cook
Apple now in fact makes more in its ‘Services’ column than it does from Mac sales. This includes iTunes, the apps stores and also things like Apple pay, iCloud and licensing. Increasing to over 6billion this quarter and a 20% increased when compared to last year.
Splitting out individual components of Apples services – The App Store revenue increased again by 35% year-over-year. Even Apple pay no has over a million users per week, although the payment service alone does not make a “meaningful financial contribution at this point” says Apple CFO Luca Maestri.
As Services sits as Apples second biggest revenue provider behind the overshadowing iPhone it may show a glimpse into the future business model. Or it may simply be Apple makes meaningful updates to its Mac line up and it bounces back above services, but the thinking towards Apple surely has to shift.