Apple's $109B Q3 Boost: Can Services Continue to Drive Growth?

Apple's outgoing CEO Tim Cook has handed over the reins to John Ternus, who will take charge on September 1. The tech giant's final full quarter under Cook's leadership saw a significant boost in revenue and profit margins.

In its Q3 results, Apple reported $109.42 billion in revenue, up 16.4% year-over-year. iPhone sales drove the growth, with a 21.7% increase to $54.25 billion. Services revenue also hit a record high of $30.74 billion, accounting for 28.1% of total sales.

The mix of hardware and services is crucial to Apple's profitability, with services boasting a gross margin of 76.5% in the December quarter - roughly double that of hardware. Every percentage point gained by services lifts consolidated profitability without requiring the sale of additional devices.

Apple's installed base has surpassed 2.5 billion devices, an all-time high across product categories and geographies. Paid subscriptions have exceeded 1.5 billion, more than 50% above the previous year's figure.