Apple’s Tim Cook has kept his $50b services promises
With TV+ about to hit and lots of love for Apple Arcade, Apple’s services business now seems certain to exceed CEO Tim Cook’s 2017 $50b/year promise.
What did Tim Cook say?
Way back in early 2017 Cook made some pretty aggressive promises around how his company planned to build its services business: “Our goal is to double the size of the services business in the next four years,” he said.
He was announcing the results of the company’s December quarter at the time, in which services generated $7.17 billion.
Apple generated $12.5 billion in services in its just gone September quarter (announced here) for a 2019 total of $46.3 billion in services alone.
Apple’s annual services income 2016-2019
- 2016: $24.3b
- 2017: $29.97b
- 2018: $37.1b
- 2019: $46.3b (up c.25% y-o-y).
Apple has more or less doubled its services income since 2016, a level of growth most companies (and certainly this impecunious individual) can only ever dream of.
To put this into perspective, Apple’s new Arcade service was only available for a few days during its most recent quarter (on a free trial basis), while the company’s Next Big Thing, Apple TV+, remains unavailable at time of writing.
The bottom lines seems to be that Apple’s smartphone sales seem to be stabilizing and its wearables business has also grown to become a $10 billion industry in its own right.
New business offerings
Apple’s new services seem destined to generate significant income.
Anecodatally, I have to say that I tried Arcade for a game called Oceanhorn 2 and am now becoming hooked on building motorways.
At $4.99 a month Arcade has proved itself sticky enough for me – and I’m not the only one with that experience.Engadget calls it “too cheap to quit”, and I agree.
Available on multiple platforms, Apple TV+ is likely to generate similar levels of early interest, during which the company will need to impress viewers (or not) with the quality of the its content.