Apple Hits 2.5 Billion Active Devices

Aside from new sales and profit records, Apple also announced a major milestone in its latest earnings report: the company now has an installed base of more than 2.5 billion active devices. That’s billion with a b and one of the reasons why Apple’s services segment can’t stop growing.

If you’re a user of one of Apple’s devices, you’re not only more likely to buy others as well, but you’re also all but guaranteed to use or subscribe to at least one of the company’s many services. Even if you’re not a die-hard Apple fan and you stick to Spotify and Netflix instead of Apple Music and Apple TV, you’ll at least use Apple Pay, meaning that Apple gets a tiny transaction fee for every purchase you make. Or, if you use an iPhone, chances are that you’ll quickly run out of iCloud storage, at which point you’re on the hook for an iCloud+ subscription, which will set you back anything between $0.99 and $59.99 per month.

Services provide Apple with a steady stream of recurring, very high-margin revenue. At the scale that Apple operates, even small monthly fees add up to billions of dollars, more than $100 billion annually to be precise. And it’s not just that: services also help with customer lock-in: once you’re entangled in Apple’s tightly knit ecosystem of devices and services, it is hard to break free – trust me, I know.