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One bright spot in Apple's dramatic letter to investors



<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "On Wednesday, Apple & nbsp; & nbsp; CEO Tim Cook dropped a boom when he published a letter to shareholders and announced that the company revised its revenue from Q1 2019 to between $ 89 billion and $ 93 billion down to $ 84 billion. "22"> On Wednesday, Apple CEO (AAPL), Tim Cook, made a boom when he published a letter to shareholders announcing that the company revised revenue from Q1
2019 from $ 89 billion to $ 93 billion down to $ 84 billion.

The news sent shock waves over Wall Street, with Apple's stock falling as much as 9.5% Thursday afternoon. The problem, Apple said, was that iPhone sales in the large China market were well-ahead of expectations, putting serious pressure on the company's expected earnings.

But things are not all judgment and gloom for Silicon Valley's largest company. In the letter, Cook also pointed out a bright spot for Apple. The service department, which includes the App Store, iCloud and Apple Music, continues to grow.

And with a video streaming service rumored to be debuting some time this year, Apple quickly puts the foundation for reinventing itself as a service company rather than an iPhone factory.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Services are ready for continued growth "data-response time =" 26 "> The services are ready for continued growth

While Apple's forecast earnings were missing market due to iPhone sales, the service business pulled in $ 10.8 billion, an increase of 28 % from the same period last year. It's a big win for the company, which has its views on doubling the business segment's 2017 revenue by 2020. That would be around $ 14 billion a quarter.

Apple's service center includes a variety of offers, including Apple Care, Apple Pay, iTunes, App Store, Apple Music, and iCloud. And with 1.3 billion active devices in consumer hands, including iPhones, iPads, MacBooks and more, Apple has a built-in audience. When Apple debuts a new service, as with Apple Music, the company beats more or less a switch and pushes the new app to the 1.3 billion units.

<p class = "canvas-atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "If the business segment's continued growth was not already a good sign The company, rumored that Apple could launch its own streaming video service in 2019 can give an even greater boost to tech giant's bottom line. "data-reactid =" 29 "> If the business segment's continued growth wasn't already A good sign of the company, rumors that Apple could launch its own streaming video service in 2019, could provide an even better boost to the technology giants' bottom line.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "There is no doubt that Apple is facing stiff competition from likes like Netflix (NFLX) and Hulu, therefore, the company is already reported to work on Hollywood heavyweights such as Steven Spielberg, and with the large embedded audience of 1.3 billion units, Apple has the potential to become a major player in the streaming room as it did with Apple Music, which has over 56 million paid and free trial versions. Spotify, segment leader, has 87 million paid subscribers. "data-response time =" 30 "> That's No doubt Apple will face stiff competition from such as Netflix (NFLX) and Hulu, and therefore the company is already working with Hollywood heavyweights like Steven Spielberg. And with the huge built-in audience of 1.3 billion units, Apple has the potential to immediately become a major player in the streaming room as it did with Apple Music, which has over 56 million paid and free trial users. Spotify, segment leader, has 87 million paid subscribers.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " There are possible roadblocks " data-response time = "31"> There are possible roadblocks

<p class = "canvas-atom texttext Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text "content =" The future of Apple's service business, however, is not a lock – two potential obstacles can throw cold water Apple's service segment. The most pressing issue is a "19459015] Supreme Court case that can determine whether Apple must fight a consumer lawsuit claim that Apple has an illegal monopoly because of the App Store. " data-response time = "32"> However, the future of Apple's service business is not a lock – two potential obstacles can throw cold water Apple's service segment. The most pressing issue is a supreme court case that can determine whether Apple must fight a consumer lawsuit claiming Apple has an illegal monopoly because of the App Store.

The clothes, if allowed to continue, would decide whether Apple can continue to take a 30% cut on App Store app sales, as consumers say, inflates app prices.

Then, the subscription providers are tired of having to pay App Store fees. Netflix and Spotify stopped recently, allowing new subscribers to pay their monthly bills through Apple's App Store, and effectively cut Apple out of the transaction and allow them to retain all revenue from their services. Users can still download the apps from the App Store, but are then redirected to Netflix and Spotify sites where they can sign up for subscriptions.

This is unlikely to cause an overwhelming impact on Apple's bottom line, but there is another potential problem that the company has to deal with at a time when the business apparently faces threats from all sides.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt More from Dan: " data-reactid = "36"> More from Dan:

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<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – -sm Mt (0.8em) – sm "type =" text "content =" The 5 best smartphones in 2018 "data-reactid =" 38 "> The 5 best smartphones in 2018

<p class = "canvas-textile-textile Mb (1.0em) Mb (0) – -M Mt (0.8em) – sm" type = "text" content = " Why Big Tech breaks free Silicon Valley "data-reactid =" 39 "> Why Big Tech breaks free Silicon Valley

<p class =" canvas atom clay rectangle Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" What is Huawei? China crown jewel now in the US crosshairs "data-reactid =" 40 "> What is Huawei? China crown jewel now in the US crosshairs

<p class =" canvas-textile-textile Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Email Daniel Howley at dhowley@oath.com; Follow him on Twitter at @DanielHowley . Follow Yahoo Finance on Facebook Twitter Instagram and LinkedIn.finance.yahoo.com/ "data-reactid =" 41 "> Email Daniel Howley at dhowley@oath.com, follow him on Twitter at @DanielHowley . Follow Yahoo Finance on Facebook Twitter [19659022] Instagram and LinkedIn.finance. yahoo.com/


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