Revenues from services remain a bright spot for Apple

Revenues from its hardware product offerings have steadily declined. Hopefully the upcoming holiday season can lift sagging sales.

With Apple’s fourth quarter results for 2016 just out, it is its third straight quarter in which it has posted declining revenues. In comparison to the previous year, its revenues were down by 9%. Despite this, Apple’s revenues were still a whopping $46.9 billion.

Much of its decline can be attributed to lower offtakes of its flagship smartphone – iPhone, whose sales dipped by 5.2%. The sale of iPads declined by 6% and the sale of Macs dipped by a significant 14%. This is not surprising since Cupertino has updated only its macbook lineup in 2016. However, this should change sometime today.

It would appear that the popularity of Apple’s original lineup has run its course, their popularity has waned and with Apple not disclosing how many Apple Watches are being sold, its not difficult to see why its revenue graph is flattening. Apple has pulled in $2.2 billion in revenues for its other products, which includes the Watch, Beats hardware, the iPod lineup and other relatively small products, for this quarter, which is a fall of 21% from a year ago.

However, this figure is likely to go when Apple reports its earnings 3 months from now as the holiday season nears. Last year, Apple’s other service category pulled in $4.4 billion in revenues.

This could be the first financial year in which Apple’s annual revenues will not grow – the first since 2001 when it launched its first iPod.

On the bright side, revenues from Apple’s service business, which comprises revenues from Apple Music and from the iTune Store, continue to grow. This quarter it has raked in $6.3 billion which marks a jump of 23.5% from its previous year value.

Revenues from services have remained Apple’s second biggest product category behind the sales of its iPhone.


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