“It’s time to stop thinking of Apple as a hardware company and start thinking of it as a service company,” Julie Verhage reports for Bloomberg. “At least, that’s what Goldman Analyst Simona Jankowski and her team are telling clients as they add the stock to their “conviction buy” list and call for a price of $163 in the next 12 months.”
We expect that over the next year, the focus will shift from unit growth (which is slowing given a maturing smartphone market) to installed base monetization and recurring revenues (“Apple-as-a-Service”). Apple’s model has already tilted that way with its new iPhone 6s installment plans, and we see the upcoming TV service as a powerful next step. — Goldman Sachs
“Due to Apple’s large and loyal customer base, the team argues that there is a ‘significant multi-year opportunity’ for the tech giant to boost monetization,” Verhage reports. “Jankowski’s team estimates that over 90 percent of those purchasing iPhones are repeat customers, which will make it much easier for Apple to become a service-like company, especially as it launches a TV service.”
Read more in the full article here.
MacDailyNews Take: As we wrote last month:
The monthly “Apple Bill” is becoming significant and Apple runs the risk of being regarded as are other companies that bill monthly: PITAs like the cable company, the electric company, the “phone” company, etc.
We’d like to see Apple offer some sort of package deal that unifies all of this stuff into manageable bundles of services. One lower price for a bundle of Apple Music, iPhone Upgrade Program, iCloud storage, the forthcoming Apple TV subscriptions, etc.