8 ms·

I think the most interesting category to watch is going to be services: 2 straight years of 20% growth, and it's now virtually tied for second largest revenue s

• adventured 10y ago
  There's no great profit in their services division, compared to their historically incredible margins and sales scale in hardware. Which is why their net income is contracting. You could double their services sales and it'll only just move the needle on that $17.x billion in net income. Apple is also going to need very substantial device sales growth to keep moving services growth over time at that pace (a given user is only going to consume so much, you need a lot more of them) - I don't see where the device growth is going to come from (China's boom days are long over in that regard; India could maybe pick up some of that slack). If you're melting off 3 million iPad units year over year, at an asp of $400 to $450, that becomes a large hole for services growth to fill. Worse yet, it's very likely China is going to become more hostile as a market for the iPhone / Apple in the next few years (both politically and in terms of the domestic competition that is shrinking the iPhone's position there). Total device contraction, which is pretty likely over the next few years, will put pressure on services growth. Cook is doing a great job at managing the spigots of sales and profit that Jobs left for him to operate. The sooner Apple can move to its post Ballmer era and stop being a sales collections company (surfing the past until the wave's energy dissipates), the better.