Robust Services growth ensures Apple is more than just an iPhone brand
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s iPhones sale dip amid supply and demand uncertainties, Services segment is following a different trend for Apple, with strong year-over-year growth of 17 per cent and setting a new all-time revenue record of USD 13.3 billion in the company's second quarter results.
The company saw all-time records in many of its Services categories -- App Store, Apple Music, Video, cloud services, its App Store search ad business, AppleCare, Apple TV Plus, Apple Arcade, Apple News Plus and Apple Card.
According to Luca Maestri, Apple's CFO, new services like Apple TV Plus, Apple Arcade, Apple News Plus and Apple Card continue to add users, content and features while contributing to overall Services growth.
"App Store revenue grew by strong double digits, thanks to robust customer demand for both in-app purchases and subscriptions. Our third-party subscription business grew across multiple categories and increased over 30 per cent year-over-year, reaching a new all-time high," Maestri informed during an earnings call on Thursday.
"Apple Music and cloud services, both set all-time revenue record and AppleCare set a March quarter record. Paid subscriptions for all three of these services were up strong double-digits," he added.
The number of both transacting and paid accounts on Apple digital content stores reached a new all-time high during the March quarter.
Apple now has over 515 million paid subscriptions across the services on its platform, up 125 million from a year ago.
"On a sequential basis, paid subscriptions grew by over 35 million. This is the highest sequential growth we have ever experienced. With this momentum, we're confident we will reach our increased target of 600 million paid subscriptions before the end of calendar 2020," said Maestri.
Apple CEO Tim Cook informed that Apple News reached 125 million monthly active users.
"We let customers skip payments without incurring interest on Apple Card for March and April in light of financial hardship for many families. We worked with everyone from Oprah to Lady Gaga to inform, entertain and give back through Apple TV and services like FaceTime and Messages set new all-time records for daily volume during this quarter," Cook told the analysts.
Wearables, Home and Accessories segment also established a new March quarter record with revenue of $6.3 billion, up 23 per cent year-over-year.
Apple Watch continues to expand its reach as over 75 per cent of the customers purchasing Apple Watch around the world during the quarter were new to the product, according to Maestri.
Mac revenue was $5.4 billion and iPad revenue was $4.4 billion.
Towards the end of the quarter, Apple launched a brand new iPad Pro that includes a first in class LiDAR scanner with some really exciting augmented reality applications and MacBook Air with significantly improved performance at a lower price.
"We're very pleased with the strong customer interest for both products," Maestri added.
✔️ Robust Services growth ensures Apple is more than just an iPhone brand
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