Apple (AAPL) shares have suffered a double-digit decline since December, and the current AAPL share price is down 3.74% at $125.07. However, the company’s strong services business and plans to enter a new market could make it worth investing in.
Apple’s services, which include platforms such as Apple TV+, Fitness+, News+, Music, Arcade, and iCloud, offer attractive profit margins and have seen significant growth in recent years. In fiscal 2022, services revenue increased 14% year-over-year to $78.1 billion, while iPhone revenue rose 7%. Additionally, services reported a 71.7% profit margin, while products had a margin of 36.3%. As Apple transitions its production line out of China, the company’s services segment offers an opportunity to diversify revenue and take pressure off the iPhone segment.
Virtual/Augmented Reality Market
Apple’s (AAPL:NSD) plans to enter the virtual/augmented reality (AR/VR) market with a new headset as soon as 2023 could also be promising for the company’s long-term outlook. The AR market was worth $25.33 billion in 2021 and is expected to reach $160.09 billion by 2027, according to Grand View Research. Apple’s entry into this market could bring in significant revenue and provide an opportunity for the company to diversify further.
While Apple’s reliance on China for iPhone production and its recent stock dip are cause for concern, the company’s services business and plans to enter the AR/VR market offer promising opportunities for long-term growth. However, investors should carefully consider their risk tolerance and investment goals before adding Apple to their portfolio.