According to Apple’s fiscal Q4 2025 financial results, the company achieved quarterly revenue of € 102.5 billion, an 8 % increase year over year. Behind this strong performance lies one of Apple’s most profitable and increasingly strategic engines: its services division. Services generated € 28.75 billion in the quarter, representing 28.06 % of total company revenue. The 15.1 % annual growth rate was driven by record results across multiple categories, including the App Store, Apple TV+, Apple Music, cloud services, advertising, and payment services.
High-margin services lead profitability
Apple’s services continue to deliver exceptional profitability, with a gross margin of 75.3 % (€ 21.6 billion). This is more than double the margin of its product segment, which stood at 36.2 %. The company’s fiscal 2025 results also mark the first time annual service revenues exceeded € 100 billion. That figure places Apple’s service business ahead of the total annual sales of major global brands such as Tesla, Tencent, and Disney. The growth highlights the company’s shift from being primarily a hardware manufacturer to a balanced technology and service ecosystem provider.
Why Apple loves the secondary Apple market
A major reason Apple continues to support a global market for used Apple iPhones, iPads, and MacBooks lies in its service economics. Users of refurbished or pre-owned Apple devices spend nearly as much on services as owners of new models. Every Apple iPhone, whether sold new or reused, fuels recurring revenue through subscriptions, digital purchases, and in-app payments.
This growing installed base, which Apple confirmed reached an all-time high across all categories, ensures long-term engagement and high loyalty. In essence, the secondary Apple market helps Apple extend the lifespan of its devices while maintaining user spending within its ecosystem.
Regulatory challenges and opportunities
Despite record performance, Apple’s service division faces increasing regulatory pressure. The US Department of Justice, UK regulators, and European authorities are challenging its App Store fees and control over digital distribution. Analysts estimate that Apple Pay, iCloud, and App Store transactions together account for nearly a quarter of its total revenue but as much as half of its profit. Yet even amid these challenges, Apple’s ability to generate recurring revenue through existing and reused devices positions it advantageously. As the secondary market for Apple devices grows, so does Apple’s most profitable business line — services.
Conclusion
It becomes clear why Apple is so actively supporting the sales of its used products. While most OEMs fear that the secondary mobile market cannibalizes new device sales — and to some extent, it does — Apple sees things differently. Refurbished and pre-owned Apple devices attract a new customer segment, as surveys show they often compete directly with mid-tier Android models. Any potential loss in new hardware sales is more than offset by Apple’s strong margins in its Services business. Moreover, once a user enters the iOS ecosystem, they tend to stay for life, remaining loyal to Apple’s hardware and software alike.
Market
Trade-in
Repair
Refurbishing
