Apple’s Service Revolution: Dominating 2025 with Innovation and Growth

If there’s any doubt that Apple is morphing into a services-based company as it prepares for the post-iPhone era, the company’s performance in 2025 should put those solidly to rest.

In a a special newsroom announcement, Apple’s services chief, Eddy Cue, pens what is effectively an open letter reflecting on how great of a year 2025 was for Apple’s services business. The numbers aren’t inherently surprising considering how much Apple’s services revenue had grown over the last five years — its most recent Q4 2025 earnings showed it eclipsing nearly everything else Apple does, coming in second only to the iPhone — but raw dollars don’t really provide much context.

That’s because Apple’s “Services” category covers a lot of stuff. It’s pretty much anything that Apple sells that isn’t hardware, and it’s not just the stuff that it sells to its customers. For example, Google pays Apple over $20 billion a year for the privilege of being the default search engine, and that also gets lumped into the “Services” category, making up a third to a quarter of Apple’s overall revenue.

The App Store

Then there’s the somewhat controversial 15–30 percent cut that Apple takes from developers for selling apps and in-app purchases and subscriptions through the App Store. Most analysts believe that accounts for another quarter of Apple’s Services revenue stream, and recent changes in Europe forcing Apple to allow third-party marketplaces don’t seem to have put a dent in that. Pundits disagree on whether that’s because most developers prefer to remain in the App Store or if it’s simply that Apple is doing everything it can to levy fees on developers who operate outside of the official App Store, but it’s probably a combination of both.

Still, it’s fair to say that even with Apple’s commission, most developers are doing quite well. After all, Apple may be taking up to 30 percent, the developers are still going home with the rest, and that’s certainly how Apple would like us to see it, as Cue highlights in today’s announcement:

Apple goes on to note that the money Apple pays out to developers “represents just a fraction” of the amount of money pouring through the ecosystem, citing $1.3 trillion in “developer billings and sales” in 2024 alone, over 90 percent of which involved no commissions to Apple. That’s likely referring to sales of things like physical goods, but it remains an open question whether Apple can really take full credit for somebody using the Amazon iPhone app to make a purchase. In that case, the app certainly made it easier to buy something on the go, and has likely also facilitated more than a few impulse purchases, but it’s not like an app from the App Store is the only way to buy stuff.

The Tangible Apple Services

While Apple runs the App Store, it mostly sits as a middleman between users and developers. Apple gets partial credit for running the marketplace, but it’s the apps that are what makes it truly great.

On the other hand, Apple offers its own set of first-party services, and in many cases it doesn’t just provide the service — it also finances and produces the content on those services.

Apple Music and Apple News+ are the only two real exceptions here, but even those have a great deal of Apple involvement. Apple licenses music like any other streaming service, but it also runs its own set of radio stations and has an editorial department that highly curates content like playlists. The company has also produced several music documentaries and other shows like Carpool Karaoke under the Apple Music brand over the years. Apple News+ is more literally just feeding up news and magazines from other sources, but again there is some editorial curation and spotlighting, plus Apple’s first-party Puzzles like Crosswords, Sudoku, and the new Emoji game.

Then there’s Apple TV, Apple Arcade, and Apple Fitness+, all of which are 100% Apple initiatives. Outside studios produce films, TV shows, and games, but all of these projects are selected and funded by Apple. There are some older franchises on Apple TV, like Peanuts and Fraggle Rock, but those back catalogs exist to support new Apple Originals. Similarly, Apple has selected older “App Store Greats” for Apple Arcade, but it’s funded the redevelopment of these to remove all in-app purchases and ads to fit with the Apple Arcade model.

Cue also notes that Apple Arcade added 50 new titles in 2025, while Apple TV “eclipsed all prior viewership records” in December, Apple Music reached “all-time highs in both listenership and new subscribers,” and Apple Fitness+ went truly global with an expansion to 28 additional countries and regions, bringing the total to 49 around the globe.

Here’s a rundown of the highlights:

1. Apple TV’s engagement was up 36 percent compared to the previous year, likely driven by the streaming release of F1, which in itself marked a banner year for Apple when it became the company’s first summer blockbuster, giving other feature films a run for their money. Pluribus has also become Apple TV’s most-watched show, and the announcement credits The Family Plan 2 and A Charlie Brown Christmas as contributing to the record viewership. It also won big at the Emmys, and has continued to rack up additional awards for shows like Severance and The Studio, which has broken nearly all records to date for a freshman comedy series.