Tim Cook Explains How Apple Services Is On Track To Be The Size Of A Fortune 100 Company

Apple Inc. AAPL CEO Tim Cook promised investors back in January its Services business would become the size of a Fortune 100 company in 2017 and then double in size within four years.

On Tuesday, the executive offered an update to his ambitious goal in conjunction with Apple's fiscal second-quarter earnings report. Speaking to CNBC, Cook noted within the Services segment, the App Store is seeing "a lot of momentum" — most notably a 20 percent growth in the developer community.

Cook added that the company now boasts over 165 million paid subscriptions across all Apple-branded services and third-party platforms.

As a whole, Services accounted for $7 billion in revenue in the quarter, which implies the company is "on target to hit the first milestone" of becoming the size of a Fortune 100 company.

"There is a lot of momentum," Cook emphasized.

For comparison, Apple's Services revenue of $7 billion appears even more impressive compared to Facebook Inc FB's entire revenue last quarter of $8.81 billion.

Not An Easy Path

Ross Geber, president and CEO of Gerber Kawasaki Wealth and Investment Management, told CNBC Apple's Services unit faces an uphill battle moving forward. Specifically, it will face competitive pressures from not only traditional rivals, but unexpected companies like Spotify, Samsung Electronic SSNLF and Netflix, Inc. NFLX.

Gebe hinted that Apple is being stingy with its cash hoard and doesn't approve of Apple's massive stock buybacks and dividends, saying, "It's time for Tim Cook to spend the money."

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