There’s only one slice of Apple delivering double digit growth

Apple’s least sexy product has overtaken every Apple gadget except the iPhone.

This is a story best told with charts. I’ve got three.

The first is a pie chart showing the sources of Apple’s revenue in the June quarter, when “Services” accounted for 14% of a total $42.4 billion, ahead of Mac (12%), iPad (11%), Watch and iPod—the last two accounted for in “Other” (5%).

The second chart shows the steep rise in Apple’s Services revenue over the past three years, using the average forecast ($6.08 billion) of my panel of analysts for the last data point (Q4 2016).

Finally, here’s the same data, plotted as rate of growth, year over year. As you can see, Services kicked into a new gear in fiscal 2016. Can growth of nearly 20% be sustained? My analysts seem to think so.

Not seeing the graphics? Try the website.

Below: The analyst’s individual estimates, pros in blue, indies in green. We’ll see who was closest to the mark after the markets close on Tuesday, Oct. 25.


Thanks as always to Posts at Eventide’s Robert Paul Leitao for pulling together the Braeburn Group numbers.


  1. Ken Cheng said:
    My gmail acct flagged this article in my inbox as “junk”. Probably the “sexy product” in the subhead.

    October 21, 2016
  2. Robert Paul Leitao said:
    Beginning in the December quarter of calendar year 2015 (FQ1 2016) the rate of growth in Services revenue ballooned due to the beneficial impact of subscription-based revenue from Apple Music. The September quarter (FQ4 2016) will complete the first full year of revenue from the company’s popular new service. Consequently, estimates reflect expected Services segment revenue growth for the quarter in the range of 20%.

    As we enter this new fiscal year, the question to be answered is: More than the iPhone, how much does the continuing rate of growth in Services revenue reflect the underlying rate of growth in Apple’s base of device owners?

    October 22, 2016

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