Apple Looks To Double Its Service Business

While Apple is still widely considered a hardware company, its services segment, including Apple Music, Apple Pay, the iTunes and App Store among other things, has grown into a huge business in recent years.

So big in fact that it is now the company's second largest source of revenue.

According to its latest earnings report, services accounted for 20 percent of Apple's total revenue between January and March, trailing only the iPhone which accounted for 54 percent of total sales.

Having been considered a tool to keep consumers locked in Apple’s universe and ultimately improve hardware sales for many years, recent statements and actions indicate that Apple has started embracing services as an opportunity of its own rather than an instrument to sell more iPhones. Bringing Apple Music to Amazon Echo devices and Apple TV streaming to smart TVs would have been unthinkable a couple of years ago, as it goes contrary to Apple’s (in)famous walled garden approach.

Apple's declared goal is to double its services business between 2016 and 2020. As the following chart shows, the company is on track to achieve that goal.

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