Apple having mixed success with services offerings

“Apple has staked much of its growth prospects on its wide-ranging services business, but a new survey indicates vastly different uptake rates for the company’s individual services offerings,” Patrick Seitz writes for Investor’s Business Daily.

“Among its current offerings, iCloud online data storage has the broadest adoption, according to a survey by Consumer Intelligence Research Partners. In the first quarter, 43% of Apple customers surveyed in the U.S. reported having a paid iCloud account,” Seitz writes. “By contrast, less than 5% of iPhone and iPad owners reported having AppleCare extended-warranty service, CIRP said in a report Tuesday.”

“Some 16% of iPhone owners said they subscribe to the Apple Music streaming service,” Seitz writes. “At the same time, 25% of iPhone owners report still using the legacy iTunes music download service.”

Read more in the full article here.

MacDailyNews Take: Apple’s services revenue rose 31% year over year to $9.19 billion in the March quarter. If that’s “mixed success,” then more, please!

SEE ALSO:
Morgan Stanley: Buy Apple shares on the ‘emerging power’ of its services – May 24, 2018
Apple as a service: Services offer growth, visibility, and profitability – May 15, 2018
AAPL’s paradigm shift – May 11, 2018
Apple Services: The nitrous in Cupertino’s profit engine – November 27, 2017
Inside Apple’s massive services results – August 9, 2017
Misunderstanding Apple Services – August 7, 2017
Dispelling the Apple Services myth – May 3, 2017
Apple’s Services business: $7 billion in revenue last quarter alone – May 3, 2017
Apple’s Services (App Store, Apple Music, Apple Pay) business is an unstoppable juggernaut that’s still just gathering strength – May 3, 2017

17 Comments

  1. As Apple’s service business is being touted as potentially being the biggest part of Apple’s future success, we can look forward to any number of articles telling us why Apple’s service business is doomed.

    If you think about the massive number of iPhone or iPad owners, even a small percentage of them paying for iCloud, AppleCare or Apple Music adds up to a staggeringly large amount of additional income.

    1. Apple might be close to becoming a trillion-dollar company but as far as Wall Street is concerned, when compared to Amazon, Apple is doomed. Nothing Apple does or has is good enough.
      /s

  2. Wow, 16% of iPhone users signed up for Apple Music? Why is this number so dismally low? That is an unbelievable failure. The price of Apple Music can’t be beat.

    1. Do you truly think that 16% of all users is a low figure? When you take on board that a certain proportion of iPhone users have been given a company phone or else are not significantly into the Apple ethos, but just want a good phone, 16% seems quite a healthy percentage.

      Many younger iPhone users will be on family subscriptions and wouldn’t appear on those statistics anyway.

      The price of Apple music is excellent, but personally I don’t subscribe because I’ve already got a house full of vinyl, CDs as well as other formats, together with large numbers of original recordings. I’ll never be able to listen to all my existing music, so don’t see the point in subscribing to access even more music.

      1. Yes, 16% is VERY low. Today’s youth simply do not buy CD’s anymore. That’s a fact. They stream. Even I havent bought a CD in over 5 years. Once I discovered streaming, that’s all i do. Spotify has nearly 100 million users. Why can’t Apple Music get more penetration than a lousy 16%. That’s a dismal number.

        It’s laughable that you think that is OK.

            1. you stated, “Today’s youth simply do not buy CD’s anymore. That’s a fact.”

              well you got your facts wrong. as the music industry continues to slide, streaming services account for relatively poor profits, about 62% of the shrinking pie as of q1 2018. are you asserting that the other 38% of sales includes no youth?

  3. Why would anyone need AppleCare for an iPad? Those things are build like tanks! Even my iPad 1 (the original, without camera, not my newer iPad Air 1) and my iPad 2 (in the hands of my father-in-law) are still going strong.

  4. Apple Music at the last count I could find has 36 million paid users and at current growth rates, will surpass Spotify this year.

    As far as Apple Care, there are lots of retailers for iPhones and iPads that try and talk consumers into their own insurance instead of Apple Care. I’ve had Apple Care on every phone since my first iPhone 3GS and over the years, I’ve had replacements on two or three of them with absolutely no hassle. Personally, I think Apple Care is a bargain.

  5. Apple care for some products (Like the new MacBook Pro with crap keyboard), has become a must and is driving revenue growth. This is a bad sign, Apple is learning if you build products that have poor build quality you get rewarded with more money. I still remember the days when Apple computers came with 3 year Apple Care out of the box.

  6. I wonder how much of iCloud adoption (extra storage payments) are due to users not having yet considered alternatives for a large chunk of what they store.

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