MacDirectory magazine is the premiere creative lifestyle magazine for Apple enthusiasts featuring interviews, in-depth tech reviews, Apple news, insights, latest Apple patents, apps, market analysis, entertainment and more.
Issue link: https://digital.macdirectory.com/i/1176476
The Triumph of the Walled Garden By Horace Dediu [Asymco.com] During 2016 Apple services revenues were $25.6 billion. In January 2017, just after the end of that year, Tim Cook said "We feel great about this momentum, and our goal is to double the size of the services business in the next four years". If Apple were to hit that target, during calendar year 2020, Apple's services revenues should exceed $50 billion. In 2017 they were $32 billion, in 2018 they were 41.5 billion and so far this year they are 23 billion. If, as has been the case during 2017 and 2018 (see graphs below,) Apple were to maintain 30% growth in Services during the rest of this year they will have revenues of $51 billion in 2019; reaching the doubling tarted a year sooner than predicted. Apple will have doubled Services in 3 years to a level equivalent to a Fortune 63 company (right behind Goldman Sachs). Keep in mind that the reported revenues are not billings or what consumers actually spend. That figure is at a run rate of over $71 billion. You can see the difference between billings and reported revenues in the graphs on the next page. So what made this possible and what is the source of growth in the future? As my estimates above show, the growth came from apps and licensing and other revenues. Apps include many third-party subscriptions and licensing includes Google TAC and other income includes