Apple Reports Record Services Revenue, Tops Earnings Estimates

Apple Reports Record Services Revenue, Tops Earnings Estimates

Apple just released its 4th quarter financials for the period ending September 30, in which services such as Apple Music generated a record $12.5 billion in revenue.

Services revenue at the company increased a whopping 18% over the same period in 2018. These services include the following:

  • Apple Music
  • App Store
  • Apple Pay
  • iCloud

On Friday, Apple will also launch Apple TV, which is a premium video streaming service. Priced at $4.99 per month, the service will be available in more than 100 countries. Those who buy a new iPhone, iPad, Apple TV, Mac or iPod Touch can receive 12 months the service for free.

Already, Apple is , likely the first many combo deals.

Overall, revenue at Apple increased a modest 1.8% to $64 billion while net income actually fell 3.1% to $13.69 billion, with an earnings per share $3.03. These numbers easily beat Wall Street estimates $62.99 billion in earnings with an earnings per share $2.84.

While revenue for services soared at the company, sales iPhones declined significantly. Sales were down 9% over the same period last year to $33.36 billion. But this was still better than the $32.77 billion in revenues that was estimated as well as better than the 15% decline in sales the company experienced in the previous 3 quarters.

Apple is betting big on TV.

During an earnings call, analysts asked company CEO Tim Cook about the rationale for giving away 12 free months TV, especially as some believe it could considerably affect earnings. While at first he said, “It’s a gift to our users,” Cook also admitted that they had a clear business strategy in making the fer. He said that it “allows us to maximize subscribers in the early going.”

Analysts also questioned the company’s strategy only fering a limited amount content, particularly in comparison to competitors such as Netflix. Cook, though, insisted that this was actually a positive feature their platform, as he said that TV was “the first all-original video subscription service.”

The service will launch with 9 shows, which so far have received lackluster reviews.