Apple’s Underappreciated Services Business Could Be Growth Engine — Credit Suisse - Digits - WSJ

Profit different

"In Apple’s latest quarterly report, services accounted for just 8% of total revenues at roughly $6.1 billion. But the segment has been expanding, with sales from services up 26% from the same time a year ago.

Services, as defined by Apple, include Internet services, AppleCare, Apple Pay and licensing, among other offerings.

Gross profits from Apple’s services could more than double by 2020, wrote Mr. Garcha. He estimates that gross profits, or sales minus the cost of goods sold, could rise to $33.7 billion that year, representing 29% of gross income. Already gross profits from services have grown to $14.5 billion a year today from $3.2 billion in 2010, he said."

Apple’s Underappreciated Services Business Could Be Growth Engine — Credit Suisse - Digits - WSJ