Apple just released its first quarterly earnings report of the new year, and the company was quick to share that it was a banner quarter for the company’s Services segment which topped $7.17 billion, growing 18 percent year-over-year from $6.05 billion in Q1 of 2016.
“Revenue from Services grew strongly over last year, led by record customer activity on the App Store, and we are very excited about the products in our pipeline,” CEO Tim Cook said in a press release from the company.
“Services,” which includes revenue from Apple’s digital content plays like iCloud, ApplePay, Apple Music, the App Store and other services like AppleCare has long been an increasingly critical market for the tech giant, especially as it sees some of its central hardware categories grow a bit long in the tooth.
In the earnings call following the quarterly release, Apple CEO Tim Cook detailed that he expected the company’s Services sector to double in the next four years, and that this year he expected revenues in the category to grow to the size of a Fortune 100 company.
He also detailed that the App Store saw around $3 billion in purchases in December alone, its largest month to date he said. Overall App Store sales saw a 43% year-over-year increase with an increase in both the number of accounts and the average revenue per account.
Last quarter, Services revenues popped above the company’s overall Mac sales but this quarter, holiday sales of the Mac grew to eclipse services yet again. This may be the last quarter we ever see this trend however as Services seem to blast off.
This growth all comes as Apple prepares to make the risky but potentially highly lucrative entrance into producing original digital content, though it will likely initially be bundled into the company’s Apple Music subscription.