Apple Services Revenue Led by Google Search Default

Apple services revenue reached an all-time high of $26.6 billion, with double-digit growth in both developed and emerging markets, according to the firm’s latest quarterly financial report. By way of comparison, iPhone revenue was just shy of $47 billion.

Overall, services revenue is about 25 percent of Apple total revenue, while iPhone sales are about half of Apple total revenue. 

Estimated Apple Services Revenue Sources (FY 2024)
Source	Estimated Revenue ($B)	Percentage of Services Revenue
Google Search Deal	20–26.3	20–27%
App Store	22	22%
Apple Music	10	10%
iCloud	10	10%
Apple Pay	3	3%
AppleCare	2.5	2.50%
Apple TV, Other Subscriptions	3	3%

Most observers would agree that services revenue is important for Apple to smooth out revenue trends, as subscription revenue is predictable and recurring, compared to one-time hardware purchases.  

Services also tend to have significantly-higher profit margins. While iPhones have healthy gross margins (typically 30 percent to 40 percent), services can exceed 70 percent margins. Services revenue growth rates also are higher than device revenue, while services create more ecosystem lock-in for Apple as well.