This article was published on January 4, 2022

Apple’s now worth $3 hootin’ trillion — and half could be thanks to its services biz

Cook & Co. rolling in dough


Apple’s now worth $3 hootin’ trillion — and half could be thanks to its services biz
Ivan Mehta
Story by

Ivan Mehta

Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That's one heck of a mixed bag. He likes to say "Bleh." Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That's one heck of a mixed bag. He likes to say "Bleh."

Last night, Apple became the first US company to breach the mark of a $3 trillion market cap. The party lasted only a brief while, as the firm’s stock brought the valuation down to $2.99 trillion within a few hours.

Over the years, the iPhone has been the major force behind the Cupertino-based tech giant’s bottom line. More recently, its services business has also become an important contributor. Last quarter, services generated $18.2 billion in revenue for Apple, with 25.6% year-on-year growth.

Last week, Daniel Ives, MD of investment firm Wedbush, said in an investor note that Apple’s services business could be worth $1.5 trillion: 

The linchpin to Apple’s valuation re-rating remains its Services business which we believe is worth $1.5 trillion in the eyes of the Street, coupled by its flagship hardware ecosystem which is in the midst of its strongest product cycle in over a decade led by iPhone 13. The Services business is further monetizing the Apple golden installed base and poised to reach $100 billion+ annual revenue by 2024.

The company registered $68.2 billion in revenue in services for the fiscal year 2021. Given its growth record over the years, the $100 billion revenue prediction seems achievable.

Apple’s services offering now consists of many products introduced over years: App Store, iCloud, Apple Music, Apple TV+, Fintess+, the Apple One subscription plan, Apple Card, and Apple Pay.

As Reuters noted, the firm’s shares are trading at almost 30 times its 12-month revenue of $366 billion. For comparison, Hong Kong’s GDP in 2020 was $346 billion.

The company’s competitors have some way to go before they join the $3 trillion club. Microsoft is the closest with a $2.5 trillion market cap, while Google and Amazon are yet to breach the $2 trillion mark.

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