Nineteen of 21 analysts think it has.
The one bright spot for Apple in 2016—a fiscal annus horibilis in almost every other respect—was its 22% growth in revenue from “Services” (iTunes, iCloud, the App Stores, Apple Music, Apple Pay, etc.). By the end of 2017, according to Tim Cook, Apple Services could generate as much revenue as a Fortune 100 company.
Can Apple keep it up? Wall Street doesn’t think so. To grow 22% year over year, Apple would have to report Services revenue on Tuesday in excess of $7.4 billion. Of the 21 analysts we’ve heard from so far (14 professionals and 7 independents), only two—Stifel’s Aaron Rakers and Credit Suisse’s Kulbinder Garcha—believe Apple can do it.
All my analysts expect Services to keep growing; the only issue is at what rate. The average estimate of the full group, $6.9 billion, works out to 14% year over year. You can see the expected falloff in the growth chart below:
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Below: The analysts’ individual estimates, pros in blue, indies in green.
We should find out who was closest to the mark on Jan. 31, when Apple is scheduled report its earnings for fiscal Q1 2017. Tune in here about 30 minutes after the markets close.
UPDATE: Daniel Tello spotted $548 million that I missed:
— Daniel Tello (@dtellom) January 31, 2017