“A quick headline revealed that Apple Music now has 11 million paying subscribers,” Ophir Gottlieb writes for Capital Market Laboratories. “But the top 1% read that headline quite differently and it has nothing to do with Apple Music.”
“Recurring revenue is the most critical shift in technology in the coming decade and it is the critical theme driving the FANG stocks: Facebook (FB), Netflix (NFLX), Google (GOOG) and Amazon (AMZN), higher,” Gottlieb writes. “FANG is the biggest bet on recurring revenue we have ever seen. Facebook (FB) and Google (GOOG) rely on advertising – that’s considered recurring. Netflix (NFLX) has a recurring subscription service for streaming video on demand (SVOD) which is sweeping the world. Amazon (AMZN) has both its cloud service (AWS) and Prime service… Apple has had enough: The company has just stepped in – and we don’t need an acronym for it – it will soon stand by itself as the single largest recurring revenue machine the world has ever known. Don’t look to Apple Music – that’s the distraction.”
“Apple services is about to become so large that revenue from services alone will be larger than all of Facebook’s total revenue in 2015,” Gottlieb writes. “iPhone is suddenly recurring… Apple has now combined direct financing with automatic upgrades that will be paid to Apple each month, on a recurring basis. That last sentence could mean $300 billion in market cap to Apple, and here’s why.”
Read more in the full article here.
MacDailyNews Take: Apple’s recurring revenue potential is often overlooked.
Apple highlights services in search of Wall Street’s love – January 26, 2016
[Thanks to MacDailyNews Reader “David E.” for the heads up.]