Apple's Services Business is Booming

Apple reported its Q4 2024 earnings last week and revealed that the latest AI-powered iPhone wasn’t driving the consumer refresh cycle they had hoped, with sales down nearly 1% in its all-important holiday quarter. However, what is working at Apple is its “Services” business, which clocked more than $26 billion in sales as the company topped 1 billion total subscriptions for services like Apple Music, TV+, iCloud (storage), and more.

​To put that figure in context, if the Apple Services division were a stand-alone business, it would be the 37th-largest company in the S&P 500 Index by revenue. It would be more than double the size of Netflix or Uber. It would be more lucrative than consumer goods giant Procter & Gamble, larger than Disney, and would even outmatch Tesla in terms of pure revenue.

Perhaps most remarkable: it would be bigger than Coca-Cola and Nike combined.

We have talked about Apple’s services business with Sandbox clients for the past few years and it’s mind blowing to see these figures quantified and compared this way. The Apple ecosystem is strong with over 1 billion subscriptions and greater than $100 billion of annual revenue. 🍎

There have been many reasons for investors to buy or sell shares of Apple stock, and trading it as proven a tough task for those who have attempted. For many Sandbox clients, we have owned this position for many years as an “investor" not trying to trade it. Those clients are now in the fortunate position of making decisions on diversifying and reducing a concentrated position, in a very highly appreciated stock, of one of the most valuable businesses in the world.

Disclaimer: This is not a buy, sell or hold recommendation, nor an endorsement for the stock.