Apple’s Services Revenue Up 31% Year-Over-Year in 2Q 2018, App Store Sets New Quarterly Revenue Record

Apple's services category has continued to see rapid growth and it is becoming an increasingly important revenue driver for Apple.

In the second fiscal quarter of 2018, Apple's services brought in $9.19 billion in revenue, up 31 percent compared to the $7 billion in revenue services earned in the second quarter of 2017.


For the last several quarters, Apple's services revenue has grown so quickly that Apple sets a new record with each earnings announcement, and the second quarter of 2018 is no exception. Apple's services category includes iTunes, the App Store, Apple Music, iCloud, Apple Pay, and AppleCare.

Apple CEO Tim Cook said that in Q2 2018, the App Store, Apple Music, Apple and iCloud set all time revenue records. Apple Music set a new record for both revenue and paid subscribers, which, as was announced recently, has hit 40 million.

Apple's paid subscriptions surpassed 270 million, up 100 million from a year ago and up 30 million in the last 90 days alone.

Recently, Morgan Stanley analyst Katy Huberty predicted that over the course of the next five years, services revenue growth will contribute more than 50 percent of Apple's total revenue growth.

Huberty estimated that services revenue is at $30 per device, with just 18 percent of Apple's total device install base subscribing to paid Apple services, leaving a lot of room for growth in the coming years.

Apple in 2016 set itself a goal to double its services revenue by 2020, and the company is well on its way towards hitting that goal. Apple in 2016 earned $24 billion in revenue from services, so the double goal is $48 million.


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Apple Pay to Launch in Norway, Poland, and Ukraine Soon

Apple is planning to expand Apple Pay to Norway, Poland, and Norway in the near future, Apple CEO Tim Cook said this afternoon during Apple's earnings call covering the second fiscal quarter of 2018.

Cook did not provide specific information on a potential launch date, beyond the announcement that it would be coming "in the next several months."


Cook said that Apple Pay continues to see strong growth, with the service setting a new all-time quarterly revenue record.

Apple Pay activations have doubled year over year, and total Apple Pay transactions have tripled. With launches for transportation services in countries like Japan, Apple Pay has seen significant growth. Cook said that Apple Pay is no the most successful mobile transit payment system in Toyko.

Over the course of the last few years, Apple has been working rapidly to expand Apple Pay to additional countries, and it is now available in the United States, the United Kingdom, Australia, Canada, Singapore, Switzerland, Hong Kong, France, Russia, China, Japan, New Zealand, Spain, Taiwan, Ireland, Italy, Denmark, Finland, Sweden, UAE, and Brazil.

Related Roundup: Apple Pay

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Apple Reports Q2 2018 Results: $13.8B Profit on $61.1B Revenue, 52.2M iPhones

Apple today announced financial results for the second fiscal quarter of 2018, which corresponds to the first calendar quarter of the year.

For the quarter, Apple posted revenue of $61.1 billion and net quarterly profit of $13.8 billion, or $2.73 per diluted share, compared to revenue of $52.9 billion and net quarterly profit of $11.0 billion, or $2.10 per diluted share, in the year-ago quarter. The revenue, profit, and earnings per share numbers were records for any second fiscal quarter in the company's history.

Gross margin for the quarter was 38.3 percent, compared to 38.9 percent in the year-ago quarter, with international sales accounting for 65 percent of revenue. Apple also declared an increased quarterly dividend payment of $0.73 per share, up from $0.63. The dividend is payable on May 17 to shareholders of record as of May 14.

In addition to the increase in the dividend payment, Apple says it will start a new share repurchase authorization of $100 billion and the company says it expects to wrap up its previous $210 billion repurchase authorization by the end of the current quarter.


For the quarter, Apple sold 52.2 million iPhones, compared to 50.8 million in the year-ago quarter. iPad sales were up slightly to 9.1 million, up from 8.9 million a year ago, while Mac sales slipped to 4.1 million from 4.2 million.
“We’re thrilled to report our best March quarter ever, with strong revenue growth in iPhone, Services and Wearables,” said Tim Cook, Apple’s CEO. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.”
Apple's guidance for the third quarter of fiscal 2018 includes expected revenue of $51.5-53.5 billion and gross margin between 38 and 38.5 percent.


Apple will provide live streaming of its fiscal Q2 2018 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

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Standalone VR Headset ‘Oculus Go’ Now Available for Purchase for $199

During the F8 Facebook Developer Conference this morning, Facebook CEO Mark Zuckerberg announced the launch of the Oculus Go, the latest virtual reality headset from Oculus, which is owned by Facebook.

Priced at $199, the Oculus Go is Oculus' first standalone VR headset, which Zuckerberg said represents the "first really affordable standalone virtual reality headset."


It's shipping with more than 1,000 apps, and it features the "highest quality lenses and optics" that Oculus has ever built into a VR device. Given its affordable price point, Zuckerberg says that it'll be the "easiest way to get into VR," and that the company expects this is how many people will experience virtual reality for the first time.

Design wise, the Oculus Go looks similar to the Oculus Rift. It's a VR headset that fits over the eyes and attaches to the head with adjustable straps and breathable fabrics. It is a standalone device, which means it does not require a connection to a computer or a gaming system to operate.


Oculus Go features a 5.5-inch display with a 2560 x 1440 resolution (1280 x 1140 per eye) and it runs using Qualcomm's Snapdragon 821 processor.

There are spatial audio drivers built into the headset to provide immersive sound, but it also includes a 3.5mm headphone jack to allow users to connect headphones if desired. The included controller translates natural movements into VR using a touch surface and a trigger button.

In a review, The Verge said that while the Oculus Go is not the "flashiest or most high-tech" headset on the market, it's the "best that simple mobile VR has ever been."

The Oculus Go does not feature a full motion controller or inside-outside tracking to allow users to walk around rooms sans external cameras, and it can be likened to the Samsung Gear VR but as a dedicated piece of hardware. Looking through the Oculus Go "isn't that different" than using a Gear VR, says The Verge, and the app library is similar.
The Oculus Go makes improvements to the Gear VR, but its biggest achievement is just making mobile VR content easier to access. It's a reasonably priced device that doesn't require having a specific phone, doesn't force you to clumsily lock that phone into another piece of hardware, and doesn't drain the battery that you might need for more important tasks. And as long as VR is still a labor of love, anything that reduces the "labor" factor is great news.
In other virtual reality news, Zuckerberg says Facebook is working on a new feature that would allow customers to recreate their childhood homes using computer vision and referencing old photographs. Facebook plans to work on mapping out immersive spaces and "creating a real feeling of presence.


Later this month, Oculus will also launch Oculus TV, allowing Oculus Go users to watch entertainment from services like Hulu, ESPN, Showtime, and more.

The Oculus Go can be purchased today from the Oculus website or from Amazon for $199 for 32GB of storage. 64GB of storage is available for $249.

The launch of the Oculus Go comes just days after rumors suggesting Apple is working on its own high-powered virtual and augmented reality headset that would be untethered from a smartphone or a traditional computer.

Apple's device will reportedly include 8K displays and a custom Apple-designed processor that's more powerful than anything currently available. Apple is said to be aiming to launch its AR/VR product in 2020.

Related Roundup: Apple VR Project

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Facebook Gaining Watch Party, Overhauled Groups, and New Dating Feature

Facebook CEO Mark Zuckerberg this morning hosted a keynote event for the F8 developers conference, where he unveiled several new features that are coming to the social network.

Watch Party is a new Facebook feature that will allow you to watch videos while also chatting with your friends. When introducing the feature, Zuckerberg joked about his recent congressional testimony. "Let's say your friend is testifying in Congress," he said. "Now you can watch and laugh together, cry together."


Facebook plans to overhaul the Groups feature, which Zuckerberg says is one of the most meaning parts of Facebook. There will be a new groups tab to make groups more central to the overall Facebook experience. A new join group button and plugin will be available to developers and website administrators to make it easier for Facebook users to create and join groups.

The other major feature that's coming to Facebook is a dating feature, which Zuckerberg says is designed to help people build meaningful relationships. "This is for building real long-term relationships, not just hookups," said Zuckerberg.

The dating feature will be within Facebook, and it will be opt-in, allowing people to make a dating profile if desired. Facebook says the feature has been built with "Privacy and Safety in mind." Your friends will not see your profile, friends won't come up as dating options, and you'll only see suggestions of people who fit your preferences

For WhatsApp, Facebook's popular encrypted messaging app, Facebook will add Group Video calling features and it will expand WhatsApp businesses to allow larger companies to access WhatsApp for interacting with customers.

For Messenger, Facebook is redesigning the app's interface with a focus on making it clean, fast, and simple. Messenger will also gain the AR Camera Effects platform for using augmented reality effects when connected to friends and family.


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Instagram to Gain Revamped Explore Tool, Video Chat and AR Camera Effects

At today's F8 developer conference, Facebook CEO Mark Zuckerberg unveiled some new features that are coming soon to Instagram, which is owned by Facebook.

Instagram's Explore tab will be getting a new look that's more focused on various topics.


Facebook also plans to add a new video chat feature to Instagram, allowing two or more people to chat with each other using a FaceTime or Skype-style video chatting interface.

You can use the video chat feature to chat one-on-one with someone or with a group of people, and you can chat while continuing to browse Instagram.

Instagram is also gaining an AR Camera Effects platform, which will allow Instagram photos to be enhanced with augmented reality effects.

It's not quite clear exactly when these new features will be coming to Instagram.


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Apple Seeds Third Beta of watchOS 4.3.1 to Developers

Apple today seeded the third beta of an upcoming watchOS 4.3.1 update to developers for testing purposes, two weeks after seeding the first watchOS 4.3.1 beta and a month after releasing watchOS 4.3.

Once the proper configuration profile has been installed from the Apple Developer Center, the new watchOS 4.3.1 beta can be downloaded through the dedicated Apple Watch app on the iPhone by going to General --> Software update.


To install the update, the Apple Watch needs to have at least 50 percent battery, it must be placed on the charger, and it has to be in range of the iPhone.

Shortly before watchOS 4.3.1 was introduced, Apple stopped allowing developers to update Apple Watch apps built on the original watchOS 1 SDK. In watchOS 4.3.1, there's an alert when launching a watchOS 1 app that warns that the app may not be compatible with future versions of watchOS. This suggests Apple will drop support for watchOS 1 apps entirely in the future, just as it did with support for 32-bit iOS apps in iOS 11.

Code hidden within watchOS 4.3.1 also suggests Apple is working on introducing support for custom third-party watch faces, but this is likely a feature that would be introduced as part of a major watchOS 5 update rather than through watchOS 4.3.1.

There were no other new features discovered in watchOS 4.3.1, which is unsurprising as this is a minor 4.x.x update. It's likely this update focuses primarily on bug fixes to address issues discovered since the release of watchOS 4.3.

Apple does not provide detailed release notes for watchOS, so we may not know what's included in the update until it sees a public release.

Related Roundups: Apple Watch, watchOS 4
Buyer's Guide: Apple Watch (Neutral)

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Apple Seeds Third Beta of tvOS 11.4 to Developers

Apple today seeded the third beta of an upcoming tvOS 11.4 update to developers for testing purposes, two weeks after seeding the first beta and a month after releasing the tvOS 11.3 update.

Designed for the fourth and fifth-generation Apple TV models, the new tvOS 11.4 developer beta can be downloaded onto the Apple TV via a profile that's installed using Xcode.


tvOS 11.4, paired with iOS 11.4, reintroduces AirPlay 2 features that were present in early tvOS and iOS 11.3 betas but were removed ahead of release. With AirPlay 2, the same audio content can be played on multiple devices (like the Apple TV) throughout your home. After installing iOS 11.4 and tvOS 11.4, the Apple TV will once again be listed in the Home app.

There were no other new features discovered in the first two tvOS 11.4 updates, and it's likely it focuses on bug fixes and other small improvements. Apple's tvOS updates have historically been minor in scale, and we may not find any other new additions.

We'll update this post should new features be introduced in the third beta of tvOS 11.4.

Related Roundup: Apple TV
Buyer's Guide: Apple TV (Neutral)

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Apple Seeds Third Beta of macOS High Sierra 10.13.5 to Developers

Apple today seeded the third beta of an upcoming macOS High Sierra 10.13.5 update to developers, two weeks after seeding the second beta and a month after releasing the macOS High Sierra 10.13.4 update.

The new macOS High Sierra 10.13.5 beta can be downloaded through Apple Developer Center or the Software Update mechanism in the Mac App Store with the proper profile installed.


macOS High Sierra 10.13.5 introduces support for Messages on iCloud, a feature that was previously present in macOS High Sierra 10.13.4 betas before being pulled ahead of the release of the update. Messages on iCloud is also available in iOS 11.4.

The Messages on iCloud feature is designed to store your iMessages in iCloud for improved syncing. Right now, incoming iMessages will be sent to all devices where you're signed into your Apple ID, but it's not true cloud-based syncing because your old messages don't show up on new devices nor does deleting a message remove it from all of your devices, both features enabled through Messages on iCloud.

Messages on iCloud also allows your older iMessages to be stored in iCloud rather than on your iPhone, iPad or Mac, saving valuable storage space. Older attachments are also stored in iCloud.

The update also likely includes bug fixes and performance improvements for issues that weren't addressed in macOS High Sierra 10.13.4, but as Apple does not provide detailed release notes for macOS High Sierra updates, we may not know exactly what's included until the new software is provided to the public.

No major outward-facing changes were found in the first two betas of macOS High Sierra 10.13.5, but we'll update this post should any new features be found in the third.

The previous macOS High Sierra 10.13.4 update brought support for external graphics processors (eGPUs) along with Business Chat in Messages and several other bug fixes and smaller feature improvements.

Related Roundup: macOS High Sierra

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Apple Seeds Third Beta of iOS 11.4 to Developers

Apple today seeded the third beta of an upcoming iOS 11.4 update to developers, two weeks after seeding the second beta and over a month after releasing iOS 11.3, a major update that introduced several new features.

Registered developers can download the new iOS 11.4 beta from Apple's Developer Center or over-the-air once the proper configuration profile has been installed from the Developer Center.


The iOS 11.4 update introduces a new ClassKit framework for educational institutions, which supports new features announced at Apple's March 27 event.

For standard users, the iOS 11.4 update adds features that were originally present in the iOS 11.3 beta but removed ahead of release. It includes support for Messages on iCloud, designed to store your iMessages in iCloud rather than on each individual device, allowing for improved syncing capabilities. Currently, incoming iMessages are sent to all devices where you're signed in to your Apple ID, but there is no true cross-device syncing.

Messages on iCloud will allow you to download all of your iMessages on new devices, and a message deleted on one device will remove it on all devices. Older messages and attachments are also stored in iCloud rather than on-device, saving valuable storage space.

The update also offers AirPlay 2 features, with the Apple TV once again available in the Home app. With AirPlay 2, the same audio content can be played in multiple rooms on devices that support AirPlay 2, such as HomePod. Speaking of HomePod, there were initially signs of support for stereo sound, a long-promised feature, but stereo sound never worked in the beta and the mention was removed in beta 2.

For the iPhone 8 and iPhone 8 Plus, there is a new (PRODUCT)RED wallpaper available, which is not available on iPhone X.

iOS 11.3, the previous update to iOS 11, introduced a new Battery Health feature for monitoring the status of your iPhone's battery, Business Chat for iMessage, which lets you communicate with companies directly in the Messages app, ARKit 1.5 with augmented reality improvements, new Animoji on iPhone X, Health Records from participating medical providers, and more.

Related Roundup: iOS 11

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