Core Insights - Apple's service business is projected to exceed $100 billion for the first time in fiscal year 2025, reaching an estimated $108.6 billion, representing a year-on-year growth of approximately 13% [1] - The service segment, which includes iCloud, Apple Pay, and AppleCare, is becoming a crucial growth driver for Apple as iPhone sales stabilize [1] - Analysts predict that the service business could account for 25% of Apple's total revenue, contributing up to 50% of its profits due to high user engagement with products like Apple Pay and iCloud [1] Regulatory Challenges - Apple's service business faces legal scrutiny, including antitrust lawsuits from the U.S. Department of Justice and complaints from users in China regarding its App Store practices [3][4] - A recent ruling in the UK found that Apple abused its market power in app distribution and in-app payment systems, potentially leading to compensation claims of up to £1.5 billion [4] Future Growth Prospects - Despite legal challenges, analysts expect Apple's service business to grow significantly, potentially making up over 30% of total revenue by the end of the decade, with sales projected to reach $175 billion [5] - The overall revenue for Apple in fiscal year 2025 is estimated at $415 billion, with iPhone sales contributing about half of that figure [5] Profitability Metrics - The service business boasts a high gross margin of approximately 75%, compared to 40% for iPhones, contributing to an overall increase in Apple's gross margin from 38% in 2020 to around 47% this year [6]