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Apple had a rare quarter where it missed its revenue target due to problems in the supply chain and manufacturing. But its services revenue was a bright spot in the earnings. The company said it now has 935 million paid subscriptions across its services.These offerings, including iCloud, Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+, Apple One and Apple Pay, brought in $20.8 billion in the first quarter of the financial year. That is a 6% increase year-on-year as the company registered $19.5 billion during the same time period last year. The iPhone maker also provides enterprise services like Business Essentials, AppleCare, Tap to Pay, and Apple Financial Services.Apple CEO Tim Cook said that the company achieved double-digit revenue growth from App Store subscriptions and set all-time revenue records across a number of categories, including cloud and payment services.The company is facing regulatory pressure in multiple markets related to monopoly around app distribution through the App Store. The tech giant is already allowing third-party payment systems in some markets like the Netherlands and South Korea. Plus, the company is reportedly exploring the possibility to let users sideload apps with iOS 17.
Apple Music expanded its catalog and now has more than 100 million songs. The service also introduced a karaoke feature called Apple Sing just before the holiday and hiked prices of music streaming apps by $1 per month for individual plans and $2 per month for family plans.Apple Pay is now available to millions of merchants in nearly 70 countries and regions.The continued growth in the installed base is due to extremely strong levels of customer satisfaction and loyalty and a high number of customers who are new to the products, according to the company.The tech giant made its Apple TV+ offering more attractive by signing deals to show live sports with Major League Baseball (MLB) and Major League Soccer (MLS).While the Cupertino-based company doesn’t expand into specific categories around services, it said payments and cloud services generated record revenue. Apple first launched tap-to-pay on iPhone last February with Stripe and later brought in Square, Venmo and Paypal as partners. The company previewed the Apple Pay Later solution at WWDC last year, and CEO Tim Cook said it will launch soon in an interview with CNBC on Thursday.
Earlier this month, the company introduced AI-powered narration for audiobooks with select titles. So Apple is clearly looking to expand into new areas of services that can bring in more money.Apple also said its install base of active devices has reached 2 billion, which includes iPhones, iPads, Macs, Homepods, Apple TV and Apple Watch. The company’s chief financial officer, Luca Maestri, said this milestone is important as some customers become paid subscribers to the services later.The continued growth in the installed base is due to extremely strong levels of customer satisfaction and loyalty and a high number of customers who are new to the products, according to the company. In constant currency, Apple grew services revenue double digits on top of growing 24 per cent during the December quarter a year ago.