Apple published its latest quarterly financial results last night, for the second quarter of 2018 (the company’s fiscal Q3). Big numbers ahoy: revenues up 17% year-on-year to $53.3bn and a net profit of $11.5bn. Apple sold 41.3m iPhones during the quarter, up slightly (1%) year-on-year bucking the smartphone market’s global decline.
No wonder CEO Tim Cook was feeling confident during the company’s earnings call, and he had something interesting to say about the growth of the company’s music-streaming service. “Apple Music grew by over 50% on a year-over-year basis,” Cook reminded analysts. “We’re well over 50 million listeners now when you add our paid subscribers and the folks in the trial, and so we’re moving along at a very, very good rate.”
Cook also addressed recent speculation that Apple Music was about to overtake Spotify for paid subscribers in the US. “It appears to us or in what we’ve been told is that we took the leadership position in North America during the quarter and we have the leadership position in Japan, and so in some of the markets that we’ve been in for a long period of time,” he said, while stressing that Apple sees plenty more listeners to play for in the music-streaming market.
“The key thing in music is not the competition between companies that are providing music. It’s the real challenge is to grow the market,” said Cook. “If you add everyone up that’s providing subscription music today or streaming music, it’s – outside of China – it’s less than 200 million probably around the world. And so it does seem to me there’s an extraordinary opportunity in that business to grow the market well… But I like where we are.”
Apple Music, together with other elements of the business, is paying off for Apple in terms of revenues. The company’s ‘Services’ segment generated revenues of $9.55bn last quarter, up 31% year-on-year, putting it on course to be a $10bn business by the end of 2018.