Apple Services accounted for $18.3 billion in revenue in Q4 2021 record revenue of $83.4 billion. The Services set an all-time revenue record with more than 26% Y-o-Y growth in every Services category and every geographic segment.
Apple offers a variety of Services like App Store, Apple Arcade, AppleCare, Apple TV+, Apple Music, iCloud+, Apple Fitness+, News+, and others. At the October 18 event, a new affordable Apple Service was added to its music streaming app ‘Apple Music Voice Plan’ powered by Siri to request tracks, playlists, and more. Financial analysts predicted the inclusion of a cheaper plan will likely expand the Apple Services segment further. At the Q4 2021 earnings call, Apple CFO Luca Maestri said:
We continue to see increased customer engagement with our services. The number of paid accounts on our digital content stores grew double digits and reached a new all-time high during the September quarter in each geographic segment. Also, paid subscriptions continued to show very strong growth. We now have more than 745 million paid subscriptions across the Services on our platform, which is up more than 160 million from last year and nearly 5 times the number of paid subscriptions we had less than five years ago. And finally, as Tim mentioned earlier, we’re adding new services that we think our customers will love. And we continue to improve the breadth and quality of our current services offerings.
In Q4 2021, Apple Services saw better-than-expected revenue across the board because of an increase in paying subscribers
When asked which factor(s) drove better-than-expect Services revenue in Q4 2021, Apple CEO Tim Cook said it was difficult to single out one specific area because Apple Service set all-time records across the board. He added that customers are enjoying different services offered by the company and its paid-subscribers base is growing.
When we look at the Services business, we always think about some fundamental factors that allow us to have good visibility over the sustainability of the business, right? The fact that the installed base continues to grow, that’s obviously a positive. The fact that the number of people that are actually paying on the platform continues to grow double digits, and so that obviously increases our opportunity.
The number of subscriptions that we have on the platform, we mentioned during the call, 745 million paid subs right now. It’s an increase of 160 million versus just 12 months ago, right? And obviously, the fact that we continue to launch new services, new offerings within the services that we already have, new features, that obviously gives us a lot of momentum going forward.
We’re very fortunate we have a very — now it’s a very large business, $68 billion in the last 12 months and very diversified. We sell a lot of different services and our customers seem to really enjoy the experience that they have on the platform.
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