Apple’s growing Services division is riding the wave of the secondary mobile market. One reason is the company’s trade-in program, which encourages users to exchange their old Apple iPhones for new ones. This strategy not only reduces churn but keeps customers active in Apple’s digital ecosystem, where they pay for services like iCloud and Apple Music.
Used devices compete with Android
Traded-in Apple iPhones rarely go to waste. Market surveys show these devices often find their way to new users who would have otherwise chosen a mid-range Android phone. As a result, Apple is able to strengthen its market share without hurting its premium hardware sales.
Service revenue doesn’t discriminate
Whether customers use a brand-new or used or refurbished Apple iPhone, the revenue from services is the same. Every user who logs into the App Store or pays for AppleCare boosts the company’s bottom line, regardless of the device’s age.
Record-breaking gross margin in services
In Q2 2025, Apple’s Services division reported an all-time high gross margin of 75.7%. The unit earned € 24.90 billion in revenue, with only € 6.04 billion in associated costs. This result makes Services Apple’s most profitable segment, far above the 35.9% gross margin seen in its hardware business. And Service margin is become quite close to Apple’s hardware margin.
Regulatory shifts could change the game
With regulators scrutinizing Apple’s App Store policies and commissions, the future of Services’ profit margins remains uncertain. But for now, the secondary market continues to be a quiet engine driving high-margin growth.
All graphics from SixColors.com
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Trade-in
Repair
Refurbishing
