App StoreSource: Joe Keller / iMore

What you need to know

  • Apple services reached a new record of $15.8 billion.
  • The company attributes the performance to four different factors.

Apple today announced record-breaking revenue for the first quarter of 2021, reaching new heights of over $110 billion. As Apple CFO Luca Maestri reviewed on the company's Q1 2021 earnings call, the company also saw record growth in its services business as well.

The company reached a new record of $15.8 billion with its services business in the first quarter, growing 24% year over year.

Turning to services. As I said, we reached an all-time revenue record of $15.8 billion and set all-time records in App Store, cloud services, music, advertising, AppleCare, and payment services. Our new service offerings, Apple TV+, Apple arcade, Apple News+, Apple Card, Apple Fitness+, as well as the AppleOne bundle are also contributing to overall services growth, and continue to add users, content, and features.

Maestri pointed to a number of factors for the record performance in services, including growing the company's installed base as well as paying customers on its digital stores.

The key drivers for our services growth all continued to move in the right direction. First, our installed base growth has accelerated and is an all-time high across each major product category. Second, the number of both transacting and paid accounts on our digital content stores reached a new all-time high. During the December quarter, with paid accounts increasing double digits in each of our geographic segments.

Apple Fitness App On All DevicesSource: Apple

The CFO also touched on its subscription base. The company crossed its target of 600 million paying subscribers for its services, reaching 620 million subscribers at the end of 2020.

Third, base subscriptions continue to grow nicely, and we exceeded our target of 600 million paid subscriptions before the end of calendar 2020. During the December quarter, we added more than thirty-five million sequentially, and we now have more than 620 million paid subscriptions across the services on our platform, up 140 million from just a year ago.

Maestri also says that Apple's continued effort to improve its current services contributed to the growth.

Finally, we continue to improve the breadth and quality of our current services offerings and are adding new services that we think our customers will love. For example, Apple Music recently released its biggest product update ever, with features like Listen Now, all-new search, personal radio stations, and autoplay. 90% of Apple Music users on iOS 14 have already used these new features. In payment services, we continue to expand our coverage, with nearly 90% of stores in the United States now accepting Apple Pay, so that customers can easily have a touchless payments experience.

The company recently released Apple Fitness+, it's workout subscription service, as well as Apple One, its all-in-one subscription bundle.