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Apple

How much revenue did iTunes generate for Apple last quarter?

By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
Down Arrow Button Icon
April 20, 2014, 6:29 AM ET

Click to enlarge.

FORTUNE — Apple’s (AAPL) No. 4 revenue stream — after the iPhone, iPad and Mac — is a line item the company calls iTunes, Software and Services.

The category is something of a hodgepodge — a grab bag where the company tosses, to quote from a footnote in its SEC filings, “revenue generated by sales on the iTunes Store, the App Store, the Mac App Store and the iBookstore, plus revenue from sales of AppleCare, licensing and other services.” 

Everything, in other words, that you can’t drop on the floor. Let’s call it iTunes, for short.

You can think of iTunes as Apple’s answer to Google (GOOG), Amazon (AMZN), Facebook (FB) and the rest. And in that respect there’s good news and bad news in the attached charts.

The good news is that iTunes is a large and growing business in its own right. It generated more than $16 billion in revenue in fiscal 2013, which would put it somewhere between General Mills (GIS) and The Gap (GPS) in the Fortune 500.


Source: Company reports

The bad news is that iTunes has never experienced the exponential growth rates of a pure Internet play. And according to the 29 Apple analysts who submitted iTunes estimates in our quarterly earnings roundup — 16 Wall Street professionals and 13 amateurs — its growth rate is less than half of what it was last year.

On average, our sample of analysts expect Apple this week to report quarterly iTunes revenue of $4.55 billion, up 10.6% year over year. In Q2 2013 iTunes revenue was growing at the rate of 26%.

Not even our most optimistic analyst — BNP Paribas’ Alexander Peterc — expects a repeat of that kind of growth. The Braeburn Group’s Sunil Shaw, our biggest pessimist, is looking for iTunes revenue to fall by nearly 3%.

We’ll find out who was closest to the mark when Apple reports its earnings for fiscal Q2 2014 after the markets close on Wednesday, April 23.

Below: The individual analysts estimates, with the pros in blue and the indies in green. Thanks once again to Posts at Eventide‘s Robert Paul Leitao for pulling together the Braeburn Group numbers.

About the Author
By Philip Elmer-DeWitt
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