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Apple's business model is changing from computer maker to seller of digital services. Nineteen percent of Apple's revenue comes from Services, the only business that did show growth at the end of 2023.

On Thursday, Apple released its fourth-quarter figures and they showed this picture. Revenue from hardware sales rose 0.07 percent. That from services by eleven percent, to $23 billion(Pdf).

In commenting on the quarterly figures, top executive Tim Cook did not hang a lead on this any further. Investors did not get particularly nervous, given the share price. That fell two percent after the presentation of the figures. Not exactly an implosion.

Not surprisingly, the financial market reacted resignedly. Profit margins on digital services are fine: gross 72.8 percent in December 2023, a plus of ten percent in one year.

Cook explains to financial analysts: "There are 2.2 billion active Apple devices in circulation. That's a solid foundation for future expansion of our Services business."

"We have a billion subscriptions running across all of our platforms. That's double from four years ago. We are pleased with the geographic spread across the Americas, Europe and Asia."

Apple Services is the collective name for stores such as iTunes Store, iCloud, App Store, and Book Store. Customers here charge one or more times a month for an app, subscription or in-app purchase. It also includes streaming service Apple TV+, digital advertising services, payment services, and AppleCare.

Photo: Garry Knight (cc)

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