Apple was sunny about its services in the quarter to 26 March 2016 although CFO Luca Maestri said that view does not extend to the 18 month-old Apple Pay, at least not yet.
Quizzed on the investor call about which services are driving growth, Maestri answered: “It [Apple Pay] doesn’t provide a meaningful financial contribution at this point, but as we look at the amount of transactions that are going through Apple Pay right now and we think ahead for the long term, that could be an interesting business for us as well,” after name-checking apps and music.
Earlier, the company said Apple Pay is generating “more than five times” the transaction volume of a year ago and is attracting one million new users per week.
Growth is partly the result of the payment service being rolled out to more markets. It is currently available in six countries, following recent launches in China and Singapore. A year ago, Apple Pay was only available in the US.
Since the year-ago results, the service has expanded to the UK, Canada and Australia (followed by China and Singapore). In three of the six countries (Canada, Australia and Singapore), the payment service is only available at present to American Express cardholders, which limits its uptake to a specific demographic, but still Apple has significantly broadened the payment service’s coverage over the past 12 months.
There are more than 10 million contactless-ready locations in the countries where Apple Pay has launched, including over 2.5 million locations now accepting Apple Pay in the US. More expansion of Apple Pay is “coming soon”, the company added.
The performance of services in general was arguably the highlight of the Apple results, which saw 20 per cent growth to $5.99 billion. The App Store revenue was up 35 per cent “to beat last quarter’s all-time record”, and Apple Music now has more than 13 million paying subscribers, leading to “an inflection point” following many quarters of decline in music sales from downloads.