Apple Inc. (NASDAQ:AAPL) recently posted excellent fourth quarter results, after which Apple stock touched new highs. The company’s shares have gained more than 50% since the start of the year. Analysts are bullish about the sales of iPhone X, and think that the new phone will give a major boost to the company’s average selling price per unit. There are several growth catalysts ready to take Apple stock to new highs in the coming months. Apple’s revenue stream is no longer dependent solely upon its iPhone business.
Growth in China
Perhaps the best sign in Apple’s Q4 report was the company’s growth in China. Apple’s revenue in Greater China increased by over 11% year-over-year. This eradicates market concerns that Apple might be losing ground in China amid strict policies of the government and local smartphone players.
Rising Services Revenue
Apple’s services segment, which often gets buried under the flashy news of iPhones and iPads, got the attention of the market after the company said its services business brought in a revenue of $8.5 billion in the fourth quarter, showing a 34% year-over-year growth. Apple’s service segment became the second biggest business arm of the company, beating the Mac segment. The demand of Apple’s services like Apple Pay, AppleCare, and licensing is increasing around the world.
Apple’s revenue from its subscription services grew in the fourth quarter as the company’s paid subscription numbers jumped 75% year-over-year in the period. Subscription revenue is always sustainable and gives a boost to margins. Apple management said during the earnings call that Apple Music is getting back in business and the company saw highest conversion rates in the quarter from customers who are trying the music streaming service.
Growing Mac and iPad Business
Apple’s Mac division is also showing signs of growth. In the fourth quarter, Apple sold a whopping 5.4 million units of Mac, generating over $7.2 billion in revenue. The iPad division which was becoming a disappointment has also started to show signs of strength. In the fourth quarter, the iPad business brought in a revenue of $4.8 billion in revenue, 14% up year-over-year. Taken together, these growth factors promise more strong performance in the future, and make Apple stock an excellent buy.