All of Apple's recently unveiled Services and most of its existing Services business are essentially software —- useful applications of hardware that help drive hardware purchases in addition to generating revenue on their own. Take a look at what these strategic new Services actually mean for Apple and its installed user base, starting with Apple Arcade.
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.
Over the past few years, Apple has increasingly directed analysts' attention to its growing revenues from a segment it calls Services. However, it's common to hear even Apple's happiest of customers frown at the idea, which is often cynically portrayed as an effort by the company to wring even more money from its premium hardware buyers. But the reality is that Services are largely software— and Software Sells Systems.
Analysts at Cowen have cast doubt on the possibility a return to form for iPhone shipments will take place in this quarter, as well as for the foreseeable future, and while Services will provide a reliable high point in Apple's upcoming financial results, it may not be as much of a highlight as investors may think.
Investors consistently undervalue Apple's Services, and iPhone sales are strong, which has led Morgan Stanley to raise the target price for Apple stock to $234.
The iPhone XR was the most popular iPhone model sold in the United States for the quarter ending March 2019, a survey has revealed, while the company's move towards pushing services apparently has quite a way to go before iTunes, Apple Music, and others are actively being used by the majority of iPhone owners.
Apple is one of the biggest customers of Amazon Web Services, it has been revealed, with the iPhone maker allegedly spending in excess of $30 million per month in order to enable services like iCloud to function reliably and at scale via the retailer's network of servers.
Apple's launches of its streaming video service Apple TV+ and other additions to the company's Services business won't offer as much of a gain as investors think, according to HSBC, with the iPhone maker arriving "too late" to make a major impact in any of the industries it is entering with its new offerings.
The App Store is continuing to be a stable source of Services revenue for Apple, Morgan Stanley analysts claim, with revenue from the digital storefront up 15 percent year-on-year on the back of Chinese gaming revenue, but entertainment-related apps are apparently worth monitoring for a potential downturn.
Apple vice president Peter Stern, who is in charge of rounding up partners for products like Apple News+ and Apple TV+, is reportedly well liked and — much to the chagrin of media executives — operates in the best interests of Apple, not publishers.
Apple's ecosystem is an attractive proposition for investors, Needham analysts claim as the firm upgraded the iPhone maker's stock from a "buy" to a "strong buy" rating, advising it anticipates good results for Apple's Services, Apple Watch, AirPods, and other areas in the future.
This week on the AppleInsider Podcast, Spotify wants to change the App Store rules for everybody. Victor and William break the saga down, and then examine just what Spotify is really trying to achieve.
Speaking at SXSW, presidential candidate and Senator Elizabeth Warren explicitly called out Apple's App Store as one example of what would need to be split away from the company to comply with her big tech breakup plan, if Apple wanted to continue to distribute its own apps and services.
To boost Services revenue, Apple should use its cash hoard to try to buy video streaming giant Netflix or video game publisher Activision despite neither being for sale, says analysts with J.P. Morgan.
Morgan Stanley's Katy Huberty suspects that a comprehensive media bundle including Apple's video offering and a rumored News subscription service will continue to drive Services forward, and return the company to a $1 trillion valuation.
Following the publication of its first fiscal quarter of 2019 results, encompassing the holiday season, Apple provided additional detail surrounding the decline of sales in China, as well as more information about the Services business in an earnings conference call.
Another Wall Street firm has reduced its target for Apple's stock price, with Jeffries continuing a downward trend displayed by analysts in the last few weeks, but at the same time continues to support the idea that the Services arm will become a more important part of the company's finances in the future.
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.
A dependance on the iPhone for the majority of its revenue and a saturation of the smartphone market has contributed to a downgrade of Apple's shares from HSBC, which shifted Apple down from a "Buy" grade to "Hold" and a reduced 12-month target price from $205 to $200.
Going forward, Apple will be increasingly reliant on a combination of driving up average selling prices for iPhones and fostering services revenue, several analysts contended in the wake of the company's Q4 results.
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Daniel Eran Dilger
Malcolm Owen
Mikey Campbell
Victor Marks
Mike Wuerthele
Roger Fingas
