“Diversification is key, even at Apple Inc.,” Tony Owusu reports for TheStreet. “While the company’s ubiquitous iPhone is clearly its bread and butter, Apple has opportunities to bolster its bottom line through its services businesses, specifically content creation, according to an RBC Capital Markets research note on Monday, June 25.”
“‘AAPL will further differentiate their services offering by enhancing original media content and increase the stickiness of their install base. AAPL will fixate on quality vs. quantity, but original content will differentiate its offering and enable AAPL to bundle music+content for a higher average selling price,” analyst Amit Daryanani wrote,” Owusu reports. “Apple has a $1 billion budget for content acquisition and production in 2018, according to RBC, which it has spent on projects from Steven Spielberg, Jennifer Aniston and Reese Witherspoon.”
Owusu reports, “RBC said it believes a combination of Apple Music subscribers and monetizing original content could represent a $10 billion to $12 billion annual run-rate business which would contribute between 25 cents and 75 cents to the company’s earnings per share.”
Read more in the full article here.
MacDailyNews Take: Content is going to be crucial for Apple and, if they can use it to drive device sales (while kicking the Android usurper in the teeth in the process), they’ll reap untold multiples of their content production investments.