Goldman Sachs: Buy Apple because it’s becoming a services company

“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.

Apple customers are worth up to $153 per month – November 18, 2015
The ‘Monthlification’ of Apple – October 22, 2015


  1. I would classify the push to the cloud by tech companies as Rent Seeking Behavior.
    “In economics and in public-choice theory, rent-seeking involves seeking to increase one’s share of existing wealth without creating new wealth.”
    You get nothing new- you just get put on the treadmill of forever paying for what you used to own after a purchase.

  2. I do appreciate the way Apple services my customer experience in the form of OS updates after you buy their hardware. Their services are not like MS, Amazon or Google, “To Serve Man”.

      1. For those who may not understand the above reference:

        Aliens arrive on earth carrying a manual entitled: “To Serve Man.” Humans are thankful and appreciative as the aliens cure mankind’s illnesses and provide abundant food supplies for all. The altruistic aliens invite humans to join them on their planet.

        As family & friends are about to board the flying saucer, a scientist who just deciphered the manual, shouts: “Don’t go, don’t go! _To Serve Man_ — IT’S A COOKBOOK ! “

  3. Apple is a sum of ALL its parts, something that analists aren’t capable of even counting, let alone assessing.

    It’s wrong to stick just one label on Apple even if it’s necessary for these small minded writers and trolls that can’t stand the thruth…

    Software, OS, hardware, accessories, services, cloud innovation, chip design and co-manufacturing, programing platforms, etc…are all labels that should together be counted in addition to the unrivaled army of lifelong Apple loyal users, in order to even start evaluating Apple’s real value.

    Wall street idiots don’t even understand the compounded relevance…

    Someone’s real scared of these fact to the point of manning this website amd others with down voting trolls who’s only goal is to detract attention from all positive sentiment or facts presented in reader feedback .


      1. Case in point: 8 feedbacks took 24 doen votes to TRY and make the point moot.

        APPLE IS KING OT THE HILL TROLLS – nothing you can do to deny that!



  4. Next up, Goldman Sachs how long it will take for Westfield Whip to slip into oblivion and doom with the rest of the lot.

    Gosh, buy Apple because it’s a services company. Yeah most of us have figured out GS…like last century.

  5. I remember the outrageously evil and stupid statements coming out of EconoTarderiffics when it became blatantly clear that nearly all the manufacturing jobs in the USA had been shipped to gawd-awful-China: Criminal Nation.

    What did the EconoTarderiffics say? The USA was instead going to be come a SERVICE ECONOMY and that was going to be just fine. That had to be the most idiotic thing I have ever heard out of an economist’s mouth. Disingenuous. Deceitful.

    Service Economy = You have just died. Enjoy your funeral, sad nation.

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