Across the board, Apple had a bang-up fiscal third quarter. Year-over-year, revenue was up 7%. Despite fears that consumers were waiting for the upcoming iPhone 8, the tech titan sold 41 million phones. Even iPads sold well -- growing 28%, quarter-over-quarter, and 15%, annually.
But the real story this past quarter was services.
Yes, revenue from the Apple Store, Apple Music, Apple Pay, and iCloud pumped $7.3 billion into the company’s coffers during the period. That’s up 22%, year-over-year, and an all-time high for Apple.
“Over the last 12 months, our services business has become the size of a Fortune 100 company,” CEO Tim Cook told analysts during an earnings call, on Tuesday.
Apple CFO Luca Maestri explained the recent success of services. “The App Store was a major driver of this performance,” she told analysts on Tuesday.
As proof, Maestri cited App Annie’s latest report, which showed that the App Store remains the preferred destination for the majority of customer purchases, generating nearly twice the revenue of Google Play.
Despite intense competition from Spotify and other rivals, revenue from the Apple Music streaming service also grew “very strongly,” Maestri boasted.
Across all of Apple’s services, the number of paid subscriptions surpassed 185 million -- an increase of nearly 20 million in the last 90 days alone.
The growth in services is partly attributable to international expansion.
Among other efforts, the company that Steve Jobs built launched Apple Pay in Italy in May, while the UAE, Denmark, Finland, and Sweden are scheduled to go live before the end of the calendar year.
Thanks to such aggressive expansion, Apple Pay is the top NFC payment service on mobile devices, with nearly 90% of all transactions globally, by Maestri’s estimate. Plus, “three out of four Apple Pay transactions happen outside of the U.S.”