Apple’s software ecosystem is making more money than most of its products

Apple’s software ecosystem is making more money than most of its products
Apple is not only the most profitable tech company, but it also tops the charts that include all companies worldwide. With the wide variety of products that Apple is offering – from smart watches to desktop computers, one might assume that they are the source of Apple’s record profits. And that is mostly correct, but there’s a twist.

Of course, Apple’s iPhones are bringing in the most money, after all, the company is the world’s third largest smartphone maker. What comes next, however, is not the iPad or MacBook laptops, but instead it’s the combined revenue of Apple’s services. Those include iTunes, Apple Music, the App Store and many more.

According to estimates gathered by Philip Elmer-DeWitt, analysts that closely follow Apple are predicting that the revenue coming in from Apple’s services will reach $10.3 billion for the last quarter of the 2018 fiscal year. This translates to a 21% increase year-over-year, 

The ever-increasing importance of services as a revenue stream is nothing surprising. As Apple’s market saturates with devices that provide adequate performance for a longer period of time, the shift towards spending more on software and entertainment is an expected result. Apple is well aware of that trend and is focusing efforts towards improving its services. Its ecosystem is already one of the most important factors that keep Apple users from switching to competing brands and Apple won’t let that grip become loose.

The official revenue numbers will be released by Apple in just a few days, during its scheduled earnings report on November 1, and we’ll see exactly how much cash the software is bringing.

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19 Comments

1. AmashAziz

Posts: 2934; Member since: Jun 30, 2014

That was expected. Apple's services business could have already been a Fortune 500 company if it was a separate business.

2. midan

Posts: 3124; Member since: Oct 09, 2017

"Its ecosystem is already one of the most important factors that keep Apple users from switching to competing brands and Apple won’t let that grip become loose. " Apple have made it very very easy to stay in Apple ecosystem. Really hard to leave from this when you have all this available and more coming like video subscription and more.

3. Papa_Ji

Posts: 880; Member since: Jun 27, 2016

Apple All servies are useless/joke. Most of those (alternative) service are free for android users. Apple is best at milking iSheep.

5. iAndroid18

Posts: 38; Member since: Oct 23, 2018

For Apple users, they just work as expected. For us given the freedom and way we use Android, could be what you said. Everyone likes convenience there own way.

7. bucknassty

Posts: 1373; Member since: Mar 24, 2017

idk about useless, it is pretty seamless or they attempt to make it that way. people are paying for it and they are staying for a reason... Yes there are cheaper options, better options, more expensive options, worse options out there but not everyone wants to spend a bunch of time moving their information around and trying new things... Humans like to be comfortable, you see it in everyday circumstances.

8. whatev

Posts: 2420; Member since: Oct 28, 2015

I’m sorry for your low standards, I guess you’re one of those persons who won’t allow yourself to take a coffee or snacks at a random day because that might break your financial situation, so sad :(

9. lallolu

Posts: 734; Member since: Sep 18, 2012

That is nothing to joke about. Seriously !

10. whatev

Posts: 2420; Member since: Oct 28, 2015

He’s provoking an argument and people should stand still, is that fair?

15. NateDiaz

Posts: 1092; Member since: Mar 03, 2018

Hilariously hilarious.

11. rouyal

Posts: 1583; Member since: Jan 05, 2018

You get what you pay for. Free hardly means better

12. Peaceboy

Posts: 640; Member since: Oct 11, 2018

Then why is it that apple is the only profitable company then. Butthurt coz your android doesn’t have an ecosystem. Android users are tied to prices, most wanted an iphone but can’t afford.

14. midan

Posts: 3124; Member since: Oct 09, 2017

Poor Android boy, one day you might get a job and after that you understand it's important to pay instead stealing.

20. ray200976

Posts: 4; Member since: Feb 18, 2013

Look android users isn't poor, cause lots android users are parents who's kids have iPhones. So they have plenty of money, like everyone says it's a choice which to have. As for stealing plenty sites and apps apple users use as well to get free stuff. So we use what is avail. to all.

16. Vokilam

Posts: 1384; Member since: Mar 15, 2018

Papa-ji, man, you seem to be posting such radical s**t, either blinded by your own bias or so lonely that you’re doing this purposely to force a reaction from others. I do forgive you, as you seem to have never tried an iOS device - android services ARE available to all iOS users for free as well. How do you think google makes half of their revenue? Google in the past has vocally expressed that iOS users make more for a huge chunk of their traffic - and google will cater to iOS just as vigorously as it does to its own platform. Furthermore, this shit about how android users get shit for free, provokes iOS trolls to call you “poor”. Then you complain and rebute with how rich you really are. Don’t be so dunce.

17. Nine1Sickness

Posts: 896; Member since: Jan 30, 2011

Papa_Ji you’re mad for no reason. Be happy my friend.

4. iAndroid18

Posts: 38; Member since: Oct 23, 2018

I agree on the ecosystem model for Apple. Simply easy, simple and profitable! And I type this from my S8 :)

6. bucknassty

Posts: 1373; Member since: Mar 24, 2017

This is the main reason i tell my friends to just stay apple... its familiar and they make it easy to transition information in their own system... being open is nice for people who want freedom to try other ideas, but if you aren't into that just keep it simple

* Some comments have been hidden, because they don't meet the discussions rules.

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