• Services On Track to Double by 2020
• Wearables Has a Head of Steam
• Apple’s Hardware Lending via Apple Card.

Origen: Tech.pinions Think.tank – AirPod’s Pro Impressions, Apple’s Advantage, Apple Earnings Key Points
There are a few points around Apple’s earnings that I’ll write a follow up on, but there are a few key points I want to make sure to hit today that I thought were significant.

• Services On Track to Double by 2020
  Apple’s services business just keeps growing, and for many of my long-term readers, this is not a surprise. I’ve long written about how Apple’s platform is the best positioned to drive services and subscription revenue not just to Apple but to an entire iOS ecosystem. At the end of 2016, Apple’s services business was about $25 billion in that year. In early 2017, Tim Cook stated the goal to double that business by 2020. Apple’s fiscal year 2019, the services business was $46 billion, which makes hitting $50 billion a year in 2020 a highly likely target.
  A key point Apple management made about services on the call was that services grew YoY in all geographies, calling out China. This is a significant part of the services growth story because it signals that every market where Apple competes, consumers are spending money, and the services opportunity continues. This deepens Apple’s loyalty and stickiness in every geography.
• Wearables Has a Head of Steam
  Wearables rev increased by 54% YoY. That’s big, and it shows how strong Apple Watch and AirPods are becoming in the market. We are not that far off from both Apple Watch and AirPods having an installed base of 100 million devices. But the key story here is how under-penetrated AirPods and Watch are as a part of Apple’s installed base.
  An analyst asked this exact question on the earnings call to try and get Tim Cook to give a number, but given the sales trends I’ve tracked, and my model of Apple’s product installed base, I’m confident AirPod’s and Apple Watch combined are below 20% penetration into the installed base. This means there is still significant headroom for growth, which means wearables will continue to be a bright spot for Apple and a means to continue to off-set flattening sales of iPhones.
• Apple’s Hardware Lending via Apple Card.
  Lastly, a new announcement of a feature for Apple Card caught my attention. Tim Cook announced on the call a new feature coming to Apple Card that lets consumers pay for an iPhone over a 24 month period with 0 interest. At first blush, this is very similar to Apple’s upgrade plan. However, it is much more clever. The goal here is to shift the upgrade plan concept to Apple Card, with the benefit of 3% cashback but also driving more users to Apple Card, which is the true goal. However, where this gets interesting is that it shows us the groundwork for how Apple will start to offer to finance other Apple hardware. I’m now absolutely convinced Apple will offer similar deals for Apple Watch, Mac, etc., where Apple Card owners can finance Apple hardware, and thus Apple makes it easier for people to get the hardware they want. This, in turn, drives more Apple Card usage, deeper loyalty and lock-in, and all the strategic benefits that make Apple Card quite interesting as a finance platform.

  Apple Card is so much more than a credit card, and I think it is critical to understand this.