Which Is Apple’s Best i-Business: Software or Hardware?

Apple iTunes iPhone and Mac

Source: Apple.com

In the third quarter of the year, Apple’s (NASDAQ:AAPL) fastest growing business wasn’t the iPhone. It wasn’t the Mac, and it certainly wasn’t the iPad. Instead of one of its hardware product lines, Apple reported strong results with software. iTunes, software, and services represented the fastest-growing segment of Apple’s business, as chief executive Tim Cook reported on the company’s quarterly earnings call. The category includes both iTunes Music and the App Store, for which Apple reported very strong results.

Cook told investors during the earnings call on Tuesday, “For the first nine months of this fiscal year, the line item that we call iTunes Software and Services has been the fastest growing part of our business. iTunes billings grew 25 percent year-over-year in the June quarter and reached an all-time quarterly high, thanks to the very strong results from the App Store.”

The “iTunes, Software, and Services” category, which Apple’s earnings release explains “includes revenue from sales on the iTunes Store, the App Store, the Mac App Store, and the iBooks Store, and revenue from sales of AppleCare, licensing and other services,” brought in revenue of $4.485 billion during the 2014 June quarter. That’s up 12 percent from the $3.99 billion reported for the category in 2013′s June quarter, just one year ago. In the nine months ended June 28, 2014, the category brought in $13.455 billion, up 14 percent from $11.791 in the same nine-month period a year ago. The iTunes category’s $4.485 billion revenue is also not far behind the $5.889 billion brought in by the iPad product line, or the $5.54 billion from Macs.