Apple Services revenue reached a record $31.6 billion in the September quarter, up 9.8% from a year ago, as per the latest update from Apple. Growth has stepped down through the year, from about 15% in the first half to 12.1% in the June quarter.
The segment added $2.8 billion over the year-ago quarter and grew 2.7% from the June quarter, which had slipped from $30.98 billion in the March quarter. It is one part of Apple’s fourth-quarter results, which put full-year Services at $123.3 billion, up 13.0%.
Apple Services revenue growth slowed from about 15% to 9.8% this year
Growth has stepped down in each reporting period since the first half of the fiscal year.
- First half: $61.0 billion, up about 15.1%
- June quarter: $30.7 billion, up 12.1%
- September quarter: $31.6 billion, up 9.8%
- Full year: $123.3 billion, up 13.0%
Services made up 27.6% of September-quarter revenue and 25.8% of the full year. The June quarter was the low point in dollars, and the September quarter is back above every earlier quarter of the fiscal year.
Services was still the second-largest source of growth in the quarter. Apple’s total revenue rose $12.0 billion from a year ago, and iPhone supplied $8.6 billion of that, Services $2.8 billion and Mac $2.1 billion. iPad and Wearables, Home and Accessories both fell, by about $0.7 billion each.
Over the full fiscal year Services added $14.1 billion, from $109.2 billion to $123.3 billion. Only iPhone and Mac grew faster in percentage terms in the September quarter, at 17.5% and 23.7%.
CFO Kevan Parekh said Services set all-time records in video, cloud services, payment services and advertising, and a September quarter record in music. Services gross margin was 76%, up 40 basis points from the June quarter.
Apple’s named headwinds for Services moved from gaming to licensing and currency
On the July 30 call, CFO Kevan Parekh named mobile gaming and App Store business model changes as headwinds for Services. On the November 2 call he named third-party licensing and foreign exchange as the sequential headwinds for the December quarter, when Apple expects Services to grow 8% to 9%. The September quarter itself carried more than one and a half points of sequential currency headwind.
Sensor Tower’s second-quarter data still showed mobile gaming spending fell 4.5% while non-gaming apps grew 14.6%.
Apple said in an App Store commission filing on August 18 that it may not be allowed to charge anything on purchases made through third-party app stores. It has proposed a tiered structure instead, with 15% for standard apps and 10% for some partner programs.
Apple raised Apple Music prices in July as paid subscriptions passed 1.5 billion
Apple raised Apple Music prices in July, taking the individual plan from $10.99 to $11.99 a month.
Paid subscriptions across Apple’s own services and third-party apps passed 1.5 billion paid subscriptions in the June quarter, up from 1 billion in 2023.
