Apple’s services category, which includes iTunes, the App Store, the Mac App Store, Apple Music, Apple Pay, and AppleCare is an increasingly important revenue driver for Apple amid stagnating iPhone sales, and services growth is once again hitting an all time high.
During the first fiscal quarter of 2019, Apple’s services segment brought in $10.9 billion in revenue, up from the $9.1 billion services earned in the first quarter of 2018.
In all five of its geographic regions, including China, Apple saw new December quarter revenues record for the services category.
Apple hit a December quarter record for AppleCare, and nearly 16 years after launching iTunes Store, it saw its highest quarterly revenue ever thanks to Apple Music. The App Store also saw record results propelled by record sales on Christmas and New Years.
Over 1.8 billion Apple Pay transactions were made during the quarter, 2x more than the previous quarter, and Apple News set a new record with more than 85M monthly active users.
Apple has more than 360 million paid subscribers across its services, an increase of 120 million compared to the year-ago quarter. Apple CFO Luca Maestri said that the company expects the total number of paid subscribers to surpass half a billion in 2020.
Apple is aiming to reach $14 billion in services revenue per quarter by 2020, and it is well on its way towards reaching that goal.
Apple is working on bolstering its services category in 2019, breaking into the television industry. Apple is has more than two dozen original television shows in the works right now, which will be distributed through a TV streaming service set to debut early in 2019.
An Apple News subscription service is also in the works and could come out around the same time, with Apple planning to offer access to magazines for a monthly fee, and there have been rumors Apple is considering a gaming subscription service as well.