Apple's services category has continued to see rapid growth and it is becoming an increasingly important revenue driver for Apple.
In the second fiscal quarter of 2018, Apple's services brought in $9.19 billion in revenue, up 31 percent compared to the $7 billion in revenue services earned in the second quarter of 2017.
For the last several quarters, Apple's services revenue has grown so quickly that Apple sets a new record with each earnings announcement, and the second quarter of 2018 is no exception. Apple's services category includes iTunes, the App Store, Apple Music, iCloud, Apple Pay, and AppleCare.
Apple CEO Tim Cook said that in Q2 2018, the App Store, Apple Music, Apple and iCloud set all time revenue records. Apple Music set a new record for both revenue and paid subscribers, which, as was announced recently, has hit 40 million.
Apple's paid subscriptions surpassed 270 million, up 100 million from a year ago and up 30 million in the last 90 days alone.
Recently, 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 Apple services, leaving a lot of room for growth in the coming years.
Apple in 2016 set itself a goal to double its services revenue by 2020, and the company is well on its way towards hitting that goal. Apple in 2016 earned $24 billion in revenue from services, so the double goal is $48 million.
Thursday April 26, 2018 2:45 pm PDT by Juli Clover
iTunes, Apple's software for downloading, purchasing, and managing content on iOS devices and playing Apple content on Macs and PCs, is now available for download through Microsoft's Windows 10 Store.
Microsoft first announced plans to bring the iTunes app to the Windows 10 Store in May 2017, and said at the time that the app would be available by the end of 2017. In December, though, an Apple spokesperson said that the two companies would not hit that deadline.
"We have been working with Microsoft to deliver the full iTunes experience to our customers and we need a little more time to get it right," Apple said.
iTunes has been available on the Windows platform for many years as a standalone download for most Windows users, but its addition to the Windows Store will make it easier for Windows users to find the software. Windows 10 S users have not been able to download the iTunes software as the mode only supports software downloaded from the Microsoft Store, so this will be a welcome addition for those Microsoft customers.
The addition of iTunes to the Windows Store is a win for Microsoft, as iTunes is reportedly one of the apps that Windows users search for most often.
Wednesday April 4, 2018 7:25 am PDT by Joe Rossignol
Apple has updated its special enterprise-focused version of iTunes that still has a built-in App Store for those who need it.
Download links for iTunes 126.96.36.199 have been quietly made available in an Apple support document related to deploying iPhone and iPad apps in a business environment with iTunes on Mac or Windows PCs.
The update was prepared on March 20 and released on Tuesday, according to German blog iFun.de. The version doesn't include new release notes, so it is likely a minor update with bug fixes and stability improvements.
Apple removed the App Store in iTunes 12.7 last September, but it released iTunes 12.6.3 shortly afterwards for business customers or anyone who might still need to use the desktop software to install iOS apps.
Those who have already downloaded iTunes 12.6.3 will likely not be prompted about the iTunes 188.8.131.52 update, so they'll have to update manually by downloading and installing the new version from Apple's support document.
iTunes 184.108.40.206 can be downloaded by anyone, including those who have already installed iTunes 12.7. If at any point users want to update to iTunes 12.7.4 or later, they can do so manually from the main iTunes download page.
Thursday March 29, 2018 1:58 pm PDT by Juli Clover
Apple today released an updated version of iTunes, iTunes 12.7.4, which introduces a new music video experience for Apple Music. A music video section lets users discover new and popular music videos in the Browse section of Apple Music, and there's an option to create Apple Music playlists for videos.
Apple's full release notes for iTunes 12.7.4 are below:
iTunes now includes a new music video experience for Apple Music. Find what's new and popular in Music Videos within Browse, and play videos back-to-back with music video playlists.
Today's iTunes update can be downloaded from the Mac App Store for free using the Software Update function.
iTunes 12.7.4 follows iTunes 12.7.3, a January update that introduced support for HomePod. iTunes 12.7, released last September, was the last major update to iTunes, eliminating the built-in App Store to focus solely on music, movies, TV shows, podcasts, and audiobooks.
Thursday March 22, 2018 10:51 am PDT by Juli Clover
Apple's services revenue is growing at a rapid pace and is on track to be the company's primary revenue driver in the future, according to a note Morgan Stanley analyst Katy Huberty shared with investors this morning (via Business Insider).
Huberty believes that over the course of the next five years, services revenue growth will contribute more than 50 percent of Apple's total revenue growth. The iPhone, meanwhile, will make up just 22 percent of revenue growth during the same time period, despite the fact that it's contributed 86 percent of Apple's revenue growth over the past five years.
Although "over the last five years, the vast majority (86%) of Apple's 8% annual revenue growth was driven by iPhone sales, it is through monetization of Apple's Services business that we see the company still generating mid single digit revenue growth," she said.
Huberty estimated that roughly 60% of revenue growth is now attributable to services. That, coupled with wearables, like the Apple Smart Watch, "will drive almost all of Apple's growth over the next five years," she added.
For the last several years, Apple's services category has been setting continual quarterly revenue records thanks to its rapid growth. In the first fiscal quarter of 2018, for example, services brought in $8.5 billion, up 18 percent year over year.
The services category includes iTunes, the App Store, Apple Music, iCloud, Apple Pay, and AppleCare.
According to Huberty, services revenue is at roughly $30 per device, up from $25 two years ago, but that might not be an accurate reflection of actual spending. Most Apple users do not currently pay for services, which could mean that revenue per active user is well above and "possibly double" the $30 metric.
Just 18 percent of Apple's total device installed base subscribe to paid Apple services, which means there's a lot of potential for growth in recurring revenue sources. Apple Music, iCloud, and Apple Pay are all services that Huberty believes have yet to be fully monetized.
Apple Music, as an example, has seen considerable growth since its launch and now boasts over 36 million subscribers. Just 2.9 percent of Apple customers subscribe, however. Apple Pay usage is also low, despite the fact that it's available in more than 50 percent of retail locations in the United States.
According to Huberty, Morgan Stanley is confident in Apple's growth through services monetization, with the firm setting a price target of $203 on Apple shares, which are currently trading at ~$170.
As Tim Cook often says, Apple's services category has already reached the size of a Fortune 100 company, and Apple has set a goal to double its 2016 services revenue by 2020, a target the company is well on its way to hitting.
Wednesday February 28, 2018 2:30 pm PST by Juli Clover
Apple last week shared a new support document that's designed to help App Store and iTunes users avoid phishing emails that mimic legitimate emails from Apple.
In the document, Apple outlines techniques to identify an actual App Store or iTunes email, which the company says will always include a current billing address, something scammers are unlikely to have access to.
An example of a well-crafted phishing email
Apple also says that emails from the App Store, iBooks Store, iTunes Store, or Apple Music will never ask customers to provide details like a Social Security Number, mother's maiden name, a credit card number, or a credit card CCV code.
Apple recommends that customers who receive emails asking them to update their account or payment information do so directly in the Settings app on an iPhone, iPad, or iPod touch, in iTunes or the App Store on a Mac, or in iTunes on a PC rather than through any kind of web interface.
Customers who receive a suspicious email can forward it to firstname.lastname@example.org, and any customer who may have entered personal information on a scam website should update their Apple ID password immediately.
Scam and phishing emails like those Apple describes in this support document are not new, but at the current time, there's a new wave of legitimate-looking emails going around that look much like Apple emails that can easily fool customers who don't know what to look for.
Thursday February 8, 2018 5:08 am PST by Mitchel Broussard
Following a discount on bundles for movies in the Cloverfield and Mission: Impossible franchises earlier this week, Apple on iTunes has now launched a collection of "Award Winning" film bundles focused on categories from the Academy Awards. The sale is debuting just under one month before the 90th Academy Awards on Sunday, March 4.
The categories include Best Actor, Best Actress, Best Picture, and vary from time periods like Classic to Contemporary. Each HD bundle is priced at $19.99, allowing those interested to grab four movies for the price of about two.
There are also a few "Under $10" Oscar film categories lined throughout the iTunes Movies store, broken into sections including "Best Original Screenplay" and "Best Adapted Screenplay." In the list below you'll find all of the Award Winning bundles, a few films from the Under $10 categories, and some other recent releases on iTunes that received notable discounts this week.
For more of the Oscars-related discounts on iTunes, you should be able to find the Award Winning bundles and Under $10 films featured heavily in the storefront's rotating carousel and just below the New and Noteworthy section, respectively.
If you don't yet have the Apple TV 4K to watch 4K iTunes movies on, don't forget that DirecTV Now's sale on the device remains ongoing in 2018 after initially launching last November. With the offer, when you sign up for four months of the streaming TV service at an upfront cost of around $140, you'll get the 32GB Apple TV 4K at no cost.
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This means that you can get the latest 32GB Apple TV 4K for about $40 cheaper than its traditional price point of $180, and if you're not a fan of DirecTV Now when the four months end, you can cancel the service at any time. Check out our original blog post on the DirecTV Now/4K Apple TV offer for more information, and head over to our full Deals Roundup to discover other sales happening this week.
Monday February 5, 2018 7:43 am PST by Mitchel Broussard
Apple on iTunes recently discounted a few bundles for movies in the Cloverfield, Mission: Impossible, and Jack Ryan franchises. The sale prices have gone live on iTunes alongside the reveal of new trailers for the latest entries in each franchise (as well as an all-new Cloverfield movie on Netflix), which happened during last night's Super Bowl LII.
We've listed all of the bundles and prices below, as well as a few other notable movie discounts happening this week on iTunes.
There are also a few returning deals happening today for products like the Apple Watch and iPad mini. Target has once again discounted the Apple Watch Series 1 by $70 in both 38mm ($179.99) and 42mm ($209.99). Similar to the last sale from a few weeks ago, the only devices marked down are the aluminum watches with Sport bands in Silver/White and Space Gray/Black. All models are available to ship for free, and you can get free shipping to your local Target as well, depending on stock.
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At Best Buy, the retailer has the iPad mini 4 (Wi-Fi only, 128GB) at $299.99, down from $399.99, in Gold, Space Gray, and Silver. The new offer matches the tablet's discounted price last seen in sales leading up to and following the holidays at Best Buy and Target. For those who purchase an iPad mini 4, Best Buy has also discounted Speck's StyleFolio Case for the tablet to $18.99, down from $34.99.
For more information on sales happening this week, be sure to head over to our full Deals Roundup.
Thursday February 1, 2018 1:21 pm PST by Juli Clover
Apple's services category continues to grow rapidly, and in the first fiscal quarter of 2018, Apple services, which includes iTunes, the App Store, Apple Music, iCloud, Apple Pay, and AppleCare, saw revenue of $8.5 billion, up 18 percent year over year.
The App Store saw its best holiday season ever, and Q1 2018 marked the best quarter ever for not only the App Store, but also Apple Music, iCloud, and Apple Pay. Apple Music, iCloud, and Apple Pay all saw significant growth in active users.
Paid subscriptions passed 240 million by the end of the December quarter, which Apple says is an increase of $30 million in the last 90 days alone, the largest quarterly growth ever.
Apple CEO Tim Cook says Apple is well on its way to reaching its goal to double its services revenue by 2020.
iTunes 12.7.3, according to Apple's release notes, introduces support for the HomePod. A new AirPlay menu built into iTunes 12.7.3 is designed to make it easy to choose the HomePod as an audio source and control what plays next using an Apple Music subscription.
Apple's full release notes for iTunes 12.7.3 are below:
iTunes is now designed to work with HomePod. Use the improved AirPlay menu to easily choose HomePod can control what plays next with your Apple Music subscription. To learn more about HomePod, visit https://www.apple.com/homepod.
Today's iTunes update can be downloaded from the Mac App Store for free using the Software Update function.
iTunes 12.7.3 follows iTunes 12.7.2, a December update that also focused on minor improvements. iTunes 12.7, released in September, was the last major update to iTunes, eliminating the built-in App Store to focus solely on music, movies, TV shows, podcasts, and audiobooks.
Tuesday January 23, 2018 11:39 am PST by Mitchel Broussard
A new sale on the iTunes Movies storefront has opened up today, with two-movie bundles that are all priced at $9.99.
These "Double Features" include films that are either part of a series, represent the original and rebooted versions of the movie, are the same genre, or include the same actors. Before the sale began, the bundles were priced between $19.99 and $27.99, so now you have the chance to add two films to your iTunes movies library for the price of one.
You can find the list of bundles in iTunes Movies on iOS, macOS, or tvOS, located after scrolling down past the first few categories like New & Noteworthy. Check out the full list of HD bundles on sale below:
The only two films offered in 4K in these bundles are TMNT: Out of the Shadows and Magic Mike XXL, although iTunes has also discounted The Maze Runner two-movie bundle in 4K to $12.99, down from $19.99. During a sale in December, iTunes marked down 4K films based on studios and genres, but after the initial $19.99 sale price all of the bundles have since increased to cost $29.99 and more.
In addition to the iTunes Movies sale, Amazon's Gold Box deal today includes a refurbished model of the 21.5-inch 4K iMac from late 2015 (3.1GHz, 8GB RAM, 1TB HD) for $899.99, down from $1,299.99. The iMac is being sold by Woot on Amazon, which describes its refurbished computers as "professionally restored to working order" and "inspected, cleaned, and repaired to meet manufacturer specifications."
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The iMac isn't guaranteed to come in its original packaging, but it shows limited or no wear and includes all original accessories, as well as a 1 Year Apple Warranty. Comparatively, the refurbished computer is $300 cheaper than the latest 2017 models of Apple's 4K 21.5-inch iMac, which start at $1,199.00 for the base configuration (3.0 GHz, 8GB RAM, 1TB HD) and increase from there. For those interested, the Gold Box deal will expire tonight at midnight.
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