Morgan Stanley: In U.S. alone, Apple Internet TV service could add 15 million subscribers in first year

“Morgan Stanley‘s Katy Huberty today pounds the table in favor of shares of Apple (AAPL), reiterating an Overweight rating, and a $160 price target,” Tiernan Ray reports for Barron’s.

Just in the US, we see the potential for Apple to add 15M subscribers [per year] to its TV service, or 8% of US Apple users… Our estimate of 15M subscribers assumes 12% US household or 8% US Apple user penetration. We believe the opportunity is not limited to the 11M broadband-only households and Apple can penetrate pay-TV households over time. For comparison, Apple said 25M Apple TV set top boxes are in use today, and we believe the majority is in the US. The company also said iTunes Radio had 40M listeners in the US and Australia in May 2014, about 8% penetration of the 500M global iTunes user base. In addition, Netflix has 38M US paying subscribers, and ESPN, CBS and HBO has said their streaming products addresses a 10-12M subscriber opportunity. We also believe international is a large opportunity for Apple, which is not considered in this analysis. – Katy Huberty, Morgan Stanley

Ray reports, “If Apple can land 15 million subs, it would produce $5.5 billion in revenue and $1.6 billion in profit, she writes.”

More details in the full article here.

MacDailyNews Take: Apple is firing on all cylinders (expect an avalanche of FUD any second now)!

Related articles:
Apple’s Internet TV and the changing – and unchanging – structure of TV – March 20, 2015
All-new Apple TV set to bow in June: App Store-capable, A8-powered, Siri-enabled – March 20, 2015
Apple’s Internet TV opportunity: Nearly half want to cut the cable cord – March 20, 2015
Apple Internet TV service could generate $30 billion per year – March 18, 2015
U.S. DOJ could force Comcast to offer NBCUniversal content for Apple’s Internet TV service – March 18, 2015
Apple looks to blow up the cable TV model – March 18, 2015


  1. Apple can instantly increase its audience for an Internet TV service by releasing an “Apple TV” app for Mac. While running the app, the Mac acts like the Apple TV mini-box. It’s like the old “Front Row” app that came with older Mac OS X releases, optimizing the interface for watching media.

  2. Options expired for March today. In the last minute of trading there was a huge spike in volume and a huge movement in price (compared to the rest of the day). Does anyone think this is coincidence? Does it make anyone but me nervous about trading options?

  3. “Just in the US, we see the potential for Apple to add 15M subscribers”

    Yeah, well, it will take YEARS for Apple to extended the reach beyond the US. They would have to start negotiations over and over again in EVERY country. YEARS!

    It will be US only for a very long time to come.

  4. Maybe Apple will position the hub/tv/cable box/gaming device as a monthly fee and it will be upgraded yearly. A particular tier might be $50 a month with content streaming included. In two years Apple could have 25 million U.S. customers, which will bring in a minimum of $15 billion in revenue. Within a short amount of time there could be 75 million customers worldwide, which translates into $45 billion annually.

    There will also be opportunities to increase revenue in other areas like apps, music and movies. Apple could also allow customers to pay for items and services with the Apple Watch, iPhone or iPad. Imagine seeing an advertisement for xyz skincare product and pressing the Apple Watch button to receive a free sample in the mail. There is no calling, giving cc numbers, mailing addresses, etc. I see additional revenue opportunities here as well.

    And it could get even better for customers, developers, content creators and shareholders: the possibilities of Apple providing worldwide Internet access would mean all these new business might soon match the revenue of the iPhone and accelerate the expansion of the rest of the ecosystem.

    If the new media device is released this year then 2015 will be like if the iPhone and iPad were released in the same year, and that is truly epic.

  5. imagine if Apple owned the internet service that all devices run on! Imagine that this Apple global satellite service was run on a small profit or break even basis only for Apple products! Imagine if Apple Streamed their services to all Apple Devices directly without satellite dish or cable! Imagine if Apple also added original programming! Imagine if Apple doubled in size! imagine that!

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