Apple Services business generated record revenue of $ 11.5 billion during fiscal third quarter. This is Apple's second largest unit and the most profitable. And one of the businesses in this segment is Apple Pay. This is Apple's mobile payment system and the company takes up 0.15% of the value of each transaction on the platform. For example, if someone with a compatible device (iPhone 6 and above, iPad Air and above, Macs with Sporting Touch ID and all Apple Watches) uses the system to make a $ 100 purchase, the company will take 15 cents. It may not sound like a lot of money, but multiply it by the number of transactions per month using Apple Pay, and you can see how this can be a lucrative business for Apple.
So how many transactions per month does Apple Pay involve? The tech titan said during today's revenue talk that the payment platform is used on nearly 1
billion purchases each month. And that's close to doubling the number of monthly transactions that Apple Pay was involved in last year. According to CEO Tim Cook, "Based on the June quarter results, Apple Pay is now adding more new users than PayPal and monthly transaction volume is growing four times as fast." During the quarter, Apple Pay was rolled out to 17 new countries and is now available throughout the EU. Cook says the service can be found in 47 markets.
Apple targets $ 50 billion in service revenue for 2020
Apple is also expanding the number of transit systems using Apple Pay. It has already added support for TriMet, Portland's mass transit system, and has begun rolling out support for the massive New York transportation system. Later this year, Chicagoans will be able to use the system to cover prices when commuting.
"In the United States, in addition to successful integration into Portland's transportation system in May, we will begin rolling out New York City transit and will launch in Chicago later this year. In China, Apple Pay launched the debit card for Didi, the world's largest supplier of As I've said before, transit integration is an important driver for a wider digital wallet adoption, and we're going to continue this pressure to help users leave their wallets at home in more and more cases. "- Tim Cook, CEO, Apple
After Apple iPhone shipments worldwide reached a peak of 231.22 million units in 2015, the manufacturer decided next year to focus on its Service Unit. This was a good idea because much of the revenue in this segment is recurring, such as subscriptions to Apple Music and Apple News + (and soon Apple Arcade). Also included in this category are AppleCare, iCloud, App Store and more. The company set a goal of $ 50 billion in service revenue for 2020, twice as much as it collected in 2016. This part of Apple's business relies on the number of active iPhone devices ($ 900 million at the beginning of this year). As a result, shipping growth is nice to have, but is not nearly as important. Based on the company's third-quarter fiscal report, the Services unit currently generates revenue at a cost of $ 46 billion annually. But $ 50 billion in gross next year can be achieved if Apple Pay and Apple Music continue to grow and if Apple Arcade captures the imagination of mobile players.
During the quarter, the number of monthly transactions handled by Apple Pay nearly doubled from a year ago
In total, Apple reported third-quarter tax revenue of $ 53.81 billion, up from 53, $ 27 billion. Net profit fell from $ 11.52 billion in the same period last year to $ 10.04 billion. Earnings per share fell to $ 2.18 from $ 2.34 in 2018.