Despite experiencing a decline in its other divisions, Apple’s Services sector has been steadily increasing its revenue over the past few financial quarters. The company’s Q1 2024 earnings revealed that Services had achieved a new record high. It seems evident that this category’s trajectory is only upwards, with projections indicating that it could generate $100 billion for Apple by 2025.
Apple’s Potential Annual Revenue of $400 Billion Driven by Services and iPhone Sales
According to a recent report by Counterpoint Research, it is predicted that by 2025, Services will surpass $100 billion in revenue, with Apple projected to reach $400 billion in 2024. This would make Services the second largest contributor to the technology giant’s annual revenue, accounting for 25 percent, only behind the iPhone. The report also highlights Apple’s strong advantage over its competitors due to its seamless integration of software and hardware, among other factors.
“Apple’s growing installed base, which is over 2 billion devices currently, has created a flywheel effect on the growth of the brand’s services business. Apple Store, followed by Apple Care+, Apple Music and a round-up Apple One subscription, has driven inflection points for Apple with a growing device base.
Launched in 2023, Apple One could become the single largest contributor to Apple’s services revenue. The tight software-hardware integration providing a unified and homogenous software and services experience to consumers, and a large installed base of premium consumers create a competitive advantage for Apple.”
According to Wedbush analysts, Apple’s Services division was expected to achieve a value of $1.5 trillion to $1.6 trillion by the end of 2024. In addition, the company was projected to reach a $4 trillion valuation in the same timeframe. If Apple can achieve this milestone before the start of 2025, it will be a noteworthy accomplishment, especially considering the numerous regulatory challenges it currently faces.
Despite previous reports mentioning the launch of this year’s iPhone 16 family to be lackluster, the upcoming models will not have any compelling features, which may lead to fewer upgrades and a decline in shipments.
According to Counterpoint Research, services are predicted to make up 25% of Apple’s revenue in 2025, despite potential legal and regulatory risks.
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