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APPLE'S BIG MONEY MAKER: SERVICES

Apple’s services unit operates at a 63% profit margin, a figure that the company announced for the first time Tuesday.

Apple CEO Tim Cook was touting the growth in the division, which includes Apple Music and iTunes; it was up 19% to an all-time high of $10.9 bilion in the quarter that ended 12/31.

Apple Music has contributed significantly to the growth, as has Apple Pay, CFO Luka Maestri told investors in a conference call. The company said it has 360m subscribers to its services and those of third parties, and hopes to grow that number to 500m by the end of next year.

Cook was vague about the introduction of an Internet video business, saying, “The breakdown of the cable bundle has been talked about for years and I think it will likely take place at a much faster pace this year and so we’re going to participate in that in a variety of ways. We will participate in the original content world. We have signed a multi-year partnership with Oprah. But today I’m not ready to extend that conversation beyond that point.”

Apple stock was up more than 5% to $163 in pre-market trading this morning.

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