Apple Services Revenue Tops $100 Billion

Apple is on track to surpass $100 billion in annual revenue from its services business for the first time, marking a major milestone for the tech giant even as it faces mounting legal and regulatory pressure over its App Store practices.

Services Surpass Disney and Tesla Revenues

Analysts expect Apple’s services unit—which includes iCloud, Apple Pay, AppleCare, Apple Music, and the App Store—to generate about $108.6 billion in the fiscal year ending in September, up roughly 13% from the previous year. That would make Apple’s services business alone larger than the total annual revenue of Disney, Tesla, or Tencent.

The services arm, overseen by veteran executive Eddy Cue, has doubled in size over five years. Its high margins and recurring revenue streams have helped offset slowing iPhone sales and volatile hardware markets.

Apple Services: The New Profit Engine

According to JPMorgan analyst Samik Chatterjee, services now contribute nearly 25% of Apple’s total revenue but account for about half of its profits. “Engagement on iPhones continues to grow, driven not just by a larger installed base but also by higher monetization per device,” he said.

The division also benefits from a multibillion-dollar deal with Google, which pays Apple to make Google Search the default on iPhones and iPads. Although the U.S. Department of Justice won an antitrust case against Google earlier this year, the ruling stopped short of prohibiting revenue-sharing deals, offering relief to Apple investors.

Regulatory and Legal Headwinds

Apple’s rapid growth in digital services has drawn scrutiny from regulators worldwide. The U.S. Justice Department has accused Apple of leveraging a smartphone monopoly to stifle competition, including through its App Store fees and rules on payments and smartwatches. The company is also appealing a UK tribunal ruling that found it abused its market dominance in app distribution, potentially leading to £1.5 billion in damages.

In Europe, the Digital Markets Act is forcing Apple to loosen control over app distribution and third-party payment systems, while the UK’s Competition and Markets Authority said last week that it will place Apple’s mobile platform under stricter oversight.

Apple’s Defense: Security and Ecosystem Integrity

Apple has defended its closed ecosystem, arguing that its control over software and services ensures user privacy and security. The company maintains that App Store fees fund developer tools, fraud prevention, and curation of safe digital content.

Outlook: Services Power the Next Decade

Despite growing legal headwinds, analysts forecast continued expansion. By 2030, services could generate over 30% of Apple’s total revenue, with annual sales reaching $175 billion, according to Visible Alpha data. As hardware cycles slow, Apple’s ability to turn its ecosystem into a subscription-driven platform may define the company’s next era of growth.