"iTunes software and services revenue continue to grow at a double-digit rate, thanks to an incredible ecosystem and our very large, loyal and engaged customer base," he said on a conference call with analysts last week after releasing Apple's strong quarterly earnings. "With its strong momentum in growing profitability, iTunes is a very important driver of our business not only here in the United States, but around the world. We now have an almost 800 million iTunes accounts, most of these with credit cards. This is a staggering number."
When you read between the lines, Mr. Cook is saying a number of important things:
- Apple has close to 800 million credit card numbers, a "staggering number." There are only 330 million people in the United States. A very significant number of those do not have a credit card because they are too young or too old. So Apple probably has a great majority of the US cardholders in its databases, in addition to a substantial number of the cardholders in the developed world.
- The revenue from iTunes, where the credit cards are used, continues to grow at a double-digit rate. People are using Apple iTunes more and becoming very comfortable with it.
- Cook thinks about iTunes as an ecosystem. Once somebody enters the Apple ecosystem, they usually don't leave. Apple looks to enhance that ecosystem with a product like the iPhone, which can become your wallet.