Apple Services - Not as Dominant as Apple Hardware

Apple emphasized its Services segment greatly in the past few years. It saw its iPhone sales slow down and needed to find ways to sell more to these existing, loyal users. Services became the most logical place to go.

However, Apple has had decidedly mixed results in selling services to its device customers, who think of Apple primarily as a hardware manufacturer. Penetration of different services ranges from more than 60% for paid storage to around 5% for extended warranties (Chart 1).