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.
Jefferies has initiated coverage of Apple Stock with a prediction of massive gains over the next year, based on not just iPhone sales, but also the Services revenue that grows as Apple's customer base increases.
An analyst is predicting that Apple's Search Ad business will generate $500 million in fiscal year 2018 alone — with it potentially quadrupling without any extra push by Apple or increase in ad prices by 2020.
Katy Huberty from Morgan Stanley has taken a look at Apple's App Store numbers in China, and while there does appear to be a combination of factors provoking a short-term stall in growth for Apple's iOS App Store, earnings will still be massive, and long-term Services revenue won't be impacted much, if at all.
Investment bank JP Morgan on Thursday initiated coverage on shares of Apple with an "Overweight" rating and $272 price target, saying it sees "considerable upside" for the company based on its leadership position in the smartphone market and the services it uses to amplify those revenues.
The increased costs of making larger displays is small compared to the extra revenues they will bring by driving greater use of the iPhone and tailoring to Apple's forthcoming video services, according to a new analysis.
Apple's remarkable success in iTunes and its App Stores bears striking similarity to another example of a platform developer investing in its own ecosystem: transit Value Capture. App Store Value Capture has changed the game for Apple, and is now fueling a faster rate of revenue growth for the company than all of its hardware segments combined.
Despite making the hardware business look easy, Apple hasn't always been incredibly successful in introducing new devices. But comparing its biggest hits with its worst misses helps to isolate a secret sauce that is driving demand for the company's products globally.
Analyst Gene Munster sees Apple Pay as an increasingly important part of Apple's services category, which has enjoyed record-breaking growth over the past few quarters, estimating the payment solution now has 253 million users worldwide.
During Apple's quarterly conference call for the third quarter of 2018, CEO Tim Cook made two announcements regarding Apple Pay's planned expansion for the year.
Apple's services financial category jumped 31 percent year-over-year in the third fiscal quarter of 2018, its best performance ever.
Based on the continued strength of iPhone sales, Guggenheim Partners has raised its Apple revenue estimates, with services revenues continuing to surge.
Apple is reportedly mulling a subscription bundle that incorporates the company's existing services, namely Apple Music and products sold through the News platform, with a slate of original TV shows widely rumored to be in production.
Apple's Services business is vastly undervalued by the market, and not considered part of the larger whole by investors according to investment bank Morgan Stanley.
While services will continue to grow into a massive entity on its own, longtime analyst Gene Munster says that the iPhone will remain a "stable business for the next few years."
The continued impact of the iPhone X has expectedly reverberated into Apple's second financial quarter of 2017 an interesting one — but not quite how analysts thought they would. The changes over time are best illustrated graphically, showing the magnitude of the quarter, as compared to the same quarter from of years past.
{{ summary }}
Mike Wuerthele
Malcolm Owen
Roger Fingas
Stephen Silver
William Gallagher
Daniel Eran Dilger
Andrew O'Hara
Mikey Campbell
