Apple's Services arm is set to go under a number of changes that could apply pressure to the company, Macquarie suggests in its pre-Apple results report, with concern over App Store commission revenue from in-app purchases not able to be offset by the iPhone maker's newest subscriptions for the moment.
Analysts are weighing in on Apple's quarterly financial results the morning after its release, with generally favorable impressions of iPhone shipments better than anticipated and the growth of Services.
More analysts have passed judgment on the new services Apple launched during Monday's "It's show time" event, with Macquarie and UBS both highlighting the relative lack of surprises from what was speculated in the time before the event took place.
Early analyst reactions are all over the place after Tuesday's results call, in which Apple reported $84.3 billion in revenue for the December quarter, more than it expected in its early-January revision, but less than it predicted for the quarter in November.
The continuing growth of Apple's Services arm won't last forever, warns Macquarie Research, advising investors of the possibility that revenue growth for that aspect of Apple's business could dip in 2019 for a variety of reasons.
Benjamin Schachter of Macquarie Research expects that the Supreme Court's verdict on a long-running suit over developer's fees in the App Store will be heard soon, but the ruling won't come down until early 2019, and any possible financial impact is at least a year away.
Apple delivered record revenue in its holiday quarter, but went about it in a way different than investors expected, leaving analysts to rethink their so-called "super cycle" predictions for iPhone X unit sales growth. But with the average selling price of new iPhones soaring to unexpected highs, analysts remain bullish on the company's prospects in the months to come.
With a better-than-expected iPhone 8 launch quarter, and a highly anticipated debut for the flagship iPhone X, investors on Wall Street are riding high on Apple stock, pushing shares into uncharted territory as analysts increase their forecasts to trillion-dollar market cap levels.
Led by the blockbuster debut of the iPhone 7 series, Apple exceeded Wall Street's expectations with its holiday quarter, sending shares of the company's stock higher and prompting analysts to revise their price targets upward.
Though Apple had a respectable December quarter, the company's outlook for the following three months calls for iPhone sales to decline for the first time ever. Analysts on Wall Street responded by trimming their price targets, though most still believe investors should buy in.
Apple revealed this week that its iOS App Store had a record July with $1.7 billion in transactions. But investment firm Macquarie Securities believes Wall Street isn't paying enough attention to Apple's growing and highly profitable services business.
iTunes content and the App Store are projected to be key drivers of growth for Apple moving forward, with one new forecast calling for content and apps alone to account for 20 percent of profits by 2020.