Apple's Services Revenue Up 31% Year-Over-Year in 2Q 2018, App Store Sets New Quarterly Revenue Record

Apple's services category has continued to see rapid growth and it is becoming an increasingly important revenue driver for Apple.

In the second fiscal quarter of 2018, Apple's services brought in $9.19 billion in revenue, up 31 percent compared to the $7 billion in revenue services earned in the second quarter of 2017.

For the last several quarters, Apple's services revenue has grown so quickly that Apple sets a new record with each earnings announcement, and the second quarter of 2018 is no exception. Apple's services category includes iTunes, the App Store, Apple Music, iCloud, Apple Pay, and AppleCare.

Apple CEO Tim Cook said that in Q2 2018, the App Store, Apple Music, Apple and iCloud set all time revenue records. Apple Music set a new record for both revenue and paid subscribers, which, as was announced recently, has hit 40 million.

Apple's paid subscriptions surpassed 270 million, up 100 million from a year ago and up 30 million in the last 90 days alone.

Recently, Morgan Stanley analyst Katy Huberty predicted that over the course of the next five years, services revenue growth will contribute more than 50 percent of Apple's total revenue growth.

Huberty estimated that services revenue is at $30 per device, with just 18 percent of Apple's total device install base subscribing to paid Apple services, leaving a lot of room for growth in the coming years.

Apple in 2016 set itself a goal to double its services revenue by 2020, and the company is well on its way towards hitting that goal. Apple in 2016 earned $24 billion in revenue from services, so the double goal is $48 million.