How Apple can overcome dropping iTunes revenue

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How Apple can overcome dropping iTunes revenue  Although Apple's software services are a drop in the bucket compared with its iPhone business, analysts believe they can boost the company’s total operating income by as much as $4 billion by 2017. Based on Morgan Stanley Research data charted for us by BI Intelligence, new services, including Apple’s mobile payments solution Apple Pay, will provide more sources of software revenue for Apple over the next three years. So, as revenue from iTunes continues to decline — as it has since 2011 — Apple will be able to rely on more lucrative services to improve year-over-year growth in this category. As far as other services, Morgan Stanley also expects Apple to launch a streaming music service to compete with Spotify, which could add $6 billion of services revenue and nearly $1 billion in operating income, according to the firm — that's considering Apple has a much bigger installed base than Spotify, but also assuming Apple’s subscription fee will be $3 less per month than competing services. Read »

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