Apple's Services Revenue Up 31% Year-Over-Year in 3Q 2018, Company is 'Thrilled' About Upcoming Services Pipeline

Apple's services category continues to see rapid growth, further cementing its position as an important revenue driver for Apple.

During the third fiscal quarter of 2018, Apple's services revenue brought in $9.55 billion in revenue, up 31 percent from the $7.27 billion in revenue services earned in the third quarter of 2017.

The services category includes iTunes, the App Store, the Mac App Store, Apple Music, iCloud, Apple Pay, and AppleCare.

appleservices
According to Apple CEO Tim Cook, Apple "feels great" about the momentum in its services business, and the company saw double digit growth in its active services installed base. This quarter's growth was driven by strong performance in a number of area.

Subscriptions from Apple and third parties have surpassed $300 million, an increase of 60 percent year over year. Cook called the revenue from subscriptions "significant" and an "increasing portion of services."

There are now nearly 30,000 apps that offer subscriptions, a number that continues to see strong growth.

Cook said that App Store revenue, which set a new June quarter revenue, had exceeded Apple's "wildest expectations." Customers around the world are visiting the App Store more often and downloading more apps than ever before. Citing third-party research, Cook said pointed out that the iOS App Store saw twice the revenue of Google Play.

Apple has seen rapid growth in revenue from App Store search ads, with a recent update expanding search ads to Japan, South Korea, France, Germany.

Apple Music grew by more than 50 percent year-over-year (with Cook again reiterating the 50M subscriber number from May), and AppleCare grew at its highest rate in 18 quarters. Apple's cloud services revenue was up 50 percent year over year, and communications services, including FaceTime and Messages, are hitting all time usage highs. Siri requests have exceeded 100 billion, and articles read on Apple News have doubled year over year.

Apple in 2017 set itself a goal to double its services revenue to $14 billion per quarter by 2020, and the company is well on its way to reaching that goal.

Earlier this year, Morgan Stanley analyst Katy Huberty predicted that over the course of the next five years, services revenue growth will contribute more than 50 percent of Apple's total revenue growth.

Huberty estimated that services revenue is at $30 per device, with just 18 percent of Apple's total device install base subscribing to paid services, leaving plenty of room for growth in the coming years.

Apple is working on bolstering its services category, with rumors suggesting that a new TV streaming service for its original TV shows is in the works, along with a magazine subscription service based on its April Texture acquisition.

In response to a question about Apple's future services plans, Cook said that Apple is "thrilled" with its upcoming product pipeline and the new services that are included with it, hinting at that rumored TV service. Cook explained that Apple has hired two TV executives (Jamie Erlicht and Zack Van Amburg) to work on a project that Apple is not ready to discuss. Cook said that Apple is expecting dramatic changes to the content industry and is happy to have something in the works.

"We're not really ready to share all the details of it yet, but I couldn't be more excited about what's going on there. We've got great talent in that area that we've sourced from different places and feel really good about what we will eventually offer."

Related Roundup: Apple TV
Buyer's Guide: Apple TV (Don't Buy)

Popular Stories

iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
iOS 18

iOS 18.4 Expected Next Week - Here Are the Release Notes

Friday March 28, 2025 2:01 pm PDT by
With the second release candidate of iOS 18.4 that Apple seeded out today, the company finally provided us with release notes that give a full rundown on what to expect. There's an Apple Vision Pro app, new Apple Intelligence features for notifications and additional language support, plus an Apple News Food feature for Apple News+ subscribers, and several updates that should improve the...
Magic Mouse Green

What to Expect From the Magic Mouse 3

Saturday March 29, 2025 10:15 am PDT by
Apple is reportedly working on a new Magic Mouse. Below, we recap what to expect. The two key rumors for the Magic Mouse 3 so far include a relocated charging port, along with a more ergonomic design. It was briefly rumored that the Magic Mouse 3 would also feature voice control, but that was misinterpreted information. Relocated Charging Port While the Magic Mouse switched from...
Foldable iPhone 2023 Feature Homescreen

Six Things to Know About Apple's Upcoming Foldable iPhone

Friday March 28, 2025 3:54 pm PDT by
We've been hearing rumors about a foldable iPhone for almost a decade now, but it looks like we might finally see the device come to fruition in 2026. We're going to be waiting many more months for the foldable iPhone, but so far we're hearing good things. Apple wants to make it creaseless. It's taken Apple multiple years to design a foldable iPhone that it's satisfied with because Apple ...
top stories 2025 03 29

Top Stories: WWDC 2025 Announced, iPhone 17 Pro and iOS 19 Rumors, and More

Saturday March 29, 2025 6:00 am PDT by
Apple's big developer event is a little over two months away, and rumors about what we can expect to see in Apple's next major operating system updates are becoming increasingly frequent. A public release of iOS 18.4 is also imminent with a number of updates and improvements, although we won't be getting the major Apple Intelligence Siri upgrades that had reportedly been planned for this...
iOS 19 visionOS UI Elements

Apple Codename Provides Clue About iOS 19's Rumored New Design

Sunday March 30, 2025 6:40 am PDT by
Multiple sources have claimed that iOS 19 will introduce a new design with more translucent buttons, menus, notification banners, and more, and there is now another clue that points towards this glass-like appearance. Bloomberg's Mark Gurman today said the new design project is codenamed "Solarium" internally. A solarium is a room with glass walls that allow in plenty of sunlight, so this...
Facebook Feature

Facebook's New iPhone App Feature Turns the Clock Back to 2007

Thursday March 27, 2025 1:59 pm PDT by
In the mid-to-late 2000s, Facebook was all about staying connected with friends and family. However, as the social media platform added new features and grew over time, that core experience began to get drowned out. That changes starting now, according to Meta, which today introduced a new feature that will "bring back the joy" of classic Facebook. Specifically, Meta has redesigned the...
Foldable iPhone 2023 Feature Homescreen

iPhone Foldable Display Said to Feature iPad-Style 4:3 Aspect Ratio

Friday March 28, 2025 3:44 am PDT by
Apple's upcoming "iPhone Fold" will feature a foldable screen with a 4:3 aspect ratio, according to a Chinese leaker who previously leaked the book-style device's display dimensions. The Weibo-based account Digital Chat Station claims that Apple will adopt a "roughly" 4:3 aspect ratio on the inner display in order to achieve consistency between the outer display, as well as to ensure parity...

Top Rated Comments

McScooby Avatar
87 months ago
Lift the cap on 5GB iCloud storage & watch services revenues tank!
Score: 9 Votes (Like | Disagree)
nutmac Avatar
87 months ago
Lift the cap on 5GB iCloud storage & watch services revenues tank!
Stinginess of free tier aside, 200 GB and 2 TB iCloud paid storage tiers are fantastic, excellent pricing and Family Sharing capable.

When and if Apple enhances iCloud Drive with shared folders, Shared Photo Library, versioning, offline, etc., it will be one heck of a package.
Score: 7 Votes (Like | Disagree)
Aldaris Avatar
87 months ago
I hope it’s a different pipe than their hardware pipeline...
Score: 7 Votes (Like | Disagree)
nelsonammo Avatar
87 months ago
Yes after spending $1k on a new phone, it's good to know the company has my back to nickle and dime me for an extra 99 cents per month.
Score: 5 Votes (Like | Disagree)
jive turkey Avatar
87 months ago
Yes after spending $1k on a new phone, it's good to know the company has my back to nickle and dime me for an extra 99 cents per month.
Yeah, after spending $1k on a phone, it is good to be concerned about an extra 99 cents per month. If Apple would just eliminate that obscene rip-off (where is the Consumer Protection Bureau anyway?), we would all save enough money to buy a new $1k phone every 84 years.

Come on, Apple!!!
Score: 4 Votes (Like | Disagree)
mejsric Avatar
87 months ago
Can’t wait to read about.

first trillion-dollar company
Score: 2 Votes (Like | Disagree)