Apple Services Growth Slows Despite Record Viewership

Apple's Services division achieved a new record of $30.7 billion in sales for the fiscal third quarter ended in June. This represented a 12% increase, bolstered by record viewership on Apple TV and strong performance across other categories like advertising, AppleCare, music, and video. However, growth was slower than anticipated, with executives attributing the moderation partly to challenging year-over-year comparisons due to the theatrical release of the highly successful 'F1' movie in the prior year.

Executives also pointed to foreign exchange fluctuations and headwinds in the mobile gaming sector of the App Store as contributing factors. Furthermore, Apple is navigating regulatory challenges, including a court ruling impacting link-out transactions in the U.S., for which an appeal is pending before the Supreme Court. Despite these challenges, the App Store itself set a June revenue record, and Services surpassed 1.5 billion paid subscriptions globally.

In his final earnings call before stepping down, CEO Tim Cook highlighted Apple TV+'s critical acclaim, mentioning recent releases like 'Widow's Bay' and 'Cape Fear,' alongside the upcoming fourth season of 'Ted Lasso.' The service has garnered significant industry awards, including Tony, Emmy, Grammy, and Oscar wins. Cook also noted the expansion of Apple Sports to over 170 countries and the continued subscriber engagement with F1 racing content on Apple TV.