Apple’s Services division continues to thrive even as iPhone sales decline, with the company reporting a record $26.3 billion in Services revenue for the quarter ending December 28—a 14% increase year-over-year.
The division, which includes the App Store, iCloud, Music, TV+, and other subscriptions, generated nearly $100 billion in revenue over the past year, according to CEO Tim Cook during Apple’s earnings call.
The company now boasts over 1 billion subscriptions, including third-party app subscriptions via the App Store. Apple highlighted growing customer engagement across its services, with both paid accounts and subscriptions seeing double-digit growth. Expansions in Apple Arcade and Fitness+, along with the rollout of Tap to Pay for iPhone in 20 markets, contributed to the division’s strong performance.
Regulatory Impact on Apple’s Growth
While Apple’s Services growth remains strong, investors are questioning how new regulatory changes might affect future revenue. Apple has long faced antitrust scrutiny, particularly over its App Store fees and control over in-app transactions.
Last year, the U.S. Supreme Court declined to hear Apple’s appeal in the Epic Games lawsuit, leaving a lower court ruling intact. While Apple was not found to be a monopolist, the ruling forced the company to allow developers to link to external websites for transactions. Meanwhile, Google lost a similar case, potentially encouraging more developers to challenge Apple’s app distribution policies.
Despite regulatory pressures, Apple’s Services business remains a crucial revenue driver, helping the company offset slowing iPhone sales and maintaining its financial strength in an evolving tech landscape.
