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Apple Services Would Be the 115th Largest Company Globally by Revenue

Apple Services Would Be the 115th Largest Company Globally by Revenue

Last updated 15th Dec 2022
Disclosure
  • Apple Services would have taken the 115th spot on the latest global fortune 500 listings.
  • The service’s latest revenues of $75B would have seen it edge CITIC Group ($74.69B) to the spot.

It is one of the most critical units within the Apple ecosystem yet often overlooked. Apple Services provides the software that runs the firm’s world-acclaimed products, iPhones, iMacs, iPads, and MacBooks. These products tend to dominate conversations around Apple’s earnings obscuring the former’s contribution. But that’s changing as the segment's revenues continue growing.

BanklessTimes.com has provided data putting Apple Services’ significance to Apple’s earnings in perspective. The site’s analysis shows that the unit earned the firm $75.1B in the fiscal year ending in March 2022. That was a five-fold jump from the $14.5B it realized in the 12 months preceding March 2013. The latest earnings would place it 115th in the global fortune 500’s rankings if it were a standalone entity.

How does Apple Services do it?

According to banklesstimes.com, Apple Services would have slotted in between Mitsui and CITIC group on the fortune 500 list. The former would just about pip it to the 114th spot with its $75.56B revenue. But it would dislodge the latter ($74.69B) from the 115th spot. It would have outperformed IBM, Proctor and Gamble, and Pepsi.

So how does the service do it? At its core, Apple's services business is about selling digital content and subscriptions to Apple’s customers. It does so through digital platforms, including the Apple Store, Apple Music, and iCloud. Others are Apple TV+, Apple Care, and Apple Arcade.

Apple estimates its paying subscribers to be 825M after a 165M growth from last year. The App Store has become an increasingly important source of revenue for the firm, growing at a CAGR of 11% since 2020. Besides being a direct sales channel for individual developers, it also provides an indirect revenue stream through sales made via third-party app stores.

The $100B potential

Apple anticipates that its services unit will be a crucial driver of its revenues as iPhone and iPad sales continue tanking. Apple Services has been growing year on year compared to the hardware unit. That has some analysts projecting that it’ll hit the $100B mark by 2024. One of them is Amit Daryanani, an analyst with Evercore ISI.

Amit avers that the firm’s services arm has, on average, grown by 20% in the last five years. Most of that growth has arisen from the increase in the number of Apple devices but not innovation. He also submits that Apple Services will drive average users’ revenues enabling its further growth.

Elizabeth Kerr

Elizabeth Kerr

Elizabeth is a financial content specialist from Manchester. Her specialities include cryptocurrency, data analysis and financial regulation.