When people think of Apple, they think of hardware first. iPhone, iPad, MacBook and iMac – those are the products that have made Apple what it is today: the most valuable company in the world.
Over the past few years however, another part of Apple’s business has quietly overtaken all but one of the above. Apple’s services segment accounted for $30 billion in revenue in the fiscal year ended September 30, making it the second largest contributor to overall sales behind the company’s cash cow, the iPhone, which brought in $141 billion over the past 12 months.
With Apple Music, Apple Pay, iTunes and the App Store as well as iCloud and Apple Care, Apple’s services business has become a beast of its own in recent years. As our chart illustrates, services revenue increased by more than five billion compared to the previous fiscal year and nearly doubled over the past five years. Apple’s ambitions go much further than that though. Earlier this year, CEO Tim Cook announced that the goal was to double revenue from services by 2020.