In a note to clients — as noted by Business Insider — Morgan Stanley analyst Katy Huberty says Apple’s Services platform has “tremendous upside.”
She forecasts that Services revenue growth will contribute more than 50% of the company's total revenue growth over the next five years. The iPhone, which has contributed 86% of Apple's revenue growth over the past five years, will make up 22% of revenue growth in the next five.
Apple Services include Apple Music subscriptions, iTunes Music, iCloud storage plans, paid apps from Apple's App Store, and AppleCare service plans, Apple Pay, etc. In its most recent quarter, Apple posted $8.5 billion in revenue in its services category, up 13% year-over-year.