Jared White:

It’s very apparent there’s a product category that outshines all others in terms of growth. It’s one Apple has been understandably proud of in their earnings calls for several years now, and that is Services.

And:

The Services category encompasses all the stuff Apple does online, “in the cloud.” Things like the App Store. iCloud. Apple Pay. Apple Music. The iTunes store. In other words, Services is everything you buy from Apple after you buy your initial hardware.

And this business has been exploding.

Jared digs into the details, starting with the vast difference between Apple’s cloud business of 5 years ago and the stellar operation into which that cloud business has evolved.

Another point is the way, as a percentage of the whole, Apple’s services business is increasing as the iPhone business decreases. The point being, Apple’s services growth represents diversification, less (slightly) dependence on iPhone sales. Will there come a day when iPhone sales represent less than 50% of Apple’s total revenue? Seems likely.

Thoughtful read.