In a note to clients — as noted by Seeking Alpha — Morgan Stanley analyst Katy Huberty projects that Apple’s Services revenue will grow to $100 billion by 2023.
Apple Services include Apple Music subscriptions, iTunes Music, iCloud storage plans, paid apps from Apple's App Store, and Apple Care service plans, Apple Pay, etc. A TV streaming service is expected to join the line-up in 2019.
Apple reported $37 billion revenue in this segment in fiscal 2018. CEO Tim Cook set a target of doubling Services revenue between 2016 and 2020.
“If Apple hits the target of $50 billion by 2020, it could set an even bigger goal of doubling the revenue from Services segment in another 5-7 years,” Huberty says. “Apple’s management has already made it clear that they see the future of the company totally dependent on Services segment. Currently, Services segment makes only 14% of the total revenue base. As Apple diverts more resources to streaming content and new services, we should see the revenue share of this segment increase significantly.”