May 2, 2018
Apple May 2 reported second-quarter (ended March 31) “services” revenue of $9.1 billion, which was up 31% from revenue of $7 billion during the previous-year period.
Services includes revenue from digital content and services (i.e. iTunes Store selling/renting movies, TV shows, audiobooks and music); Apple Music subscription service, AppleCare (warranty), Apple Pay, App Store, licensing and other services.
Through six months, revenue is up 24% to $17.6 billion, compared to $14.2 billion last year. Services revenue represented 15% of total revenue in the quarter compared to 13% in the previous-year period. The segment generated 12% of total revenue through six months, compared to 11% last year.
Apple attributed the increase primarily licensing, App Store and iCloud – not digital content sales. Indeed, last summer The Wall Street Journal reported iTunes’ market share selling/renting video content had dropped below 25% from above 50% in 2012.
The decline is due in part to increased SVOD use among consumers, in addition to increased competition from Amazon Instant Video and Comcast – the latter the first pay-TV operator to sell/rent movies and TV shows.
Meanwhile, Apple sold $38 billion worth of iPhones, $4.1 billion in iPads and $5.8 billion in Mac computers, which was up 14% and 6%, respectively, for iPhones and iPads. Mac sales remained flat.