Gene Munster: Apple’s latest reinvention is Apple as a service

“Apple’s recent decision to end unit reporting is evidence of Apple’s latest reinvention — into a services business,” Gene Munster and Will Thompson write for Loup Ventures. “It will take time, but this change lays the groundwork for future AAPL multiple expansion.”

“Six months ago we introduced our view of an upcoming investor paradigm shift from Apple as a hardware company to Apple as a Service,” Munster and Thompson write. “We are now in the midst of a four step transformation process: from news to knee-jerk to indifference to enlightenment.”

“From Mac to iPod to iPhone, the company has gone through several significant reinventions. Its next reinvention is beginning, as Apple transforms both its hardware and software businesses into a single unified service,” Munster and Thompson write. “In the past, when Apple entered a major transition, investor optimism initially declined, then stabilized, then improved. This process takes about a year to unfold… Late in 2019 and beyond – Investors will slowly credit the company for results in 2019 that support the Apple as a Service paradigm. Rising investor confidence in a more predictable hardware business, additive Services, and new products should result in a higher multiple for shares of AAPL.”

Much more in the full article – recommendedhere.

MacDailyNews Take: Again, are unit sales figures that no other major tech company offers (or have ever offered) really worth $300 billion in market value?

As we wrote yesterday: We’ll gladly accept a nice AAPL discount sale that benefits not only smart investors but Apple’s buyback program as well. Tim Cook et al. are wise to clam up and let the manipulators and fools speciously talk down the stock in their fact-free echo chamber as loudly as possible before Apple reports all-time record holiday quarter earnings in January.

Eventually, the so-called analysts will wise up. As we all know, they’re always well behind the curve.

When the lemmings, er… “analysts” start their upgrade parade, then you’ll know the bottom has been found.MacDailyNews, November 26, 2018

SEE ALSO:
Analysts see Apple’s long-term potential despite recent overwrought selloff – November 30, 2018
Morgan Stanley projects Apple’s Services revenue to grow to $100 billion by 2023 – November 29, 2018
The pessimism and hypocrisy surrounding Apple is endless – November 28, 2018
In the darkest hour of Apple’s ‘white-knuckle period,’ some investors are loving it – November 21, 2018
Poor news curation at Bloomberg, CNBC, Reuters created misleading iPhone supply chain panic – November 19, 2018
WSJ: Apple slashes production orders for all three new iPhone models – November 19, 2018
Misreading Apple’s supply chain and iPhone XR demand – November 15, 2018
Apple: Ignore the noise – November 14, 2018
Dialog Semi says not seeing hit to demand from Apple – November 14, 2018
Don’t panic about iPhone sales just yet – November 14, 2018
Apple stock: This is not a repeat of 2015-16 – November 14, 2018
iPhone XR production cuts not due to soft demand – analyst – November 10, 2018
Apple’s Asian suppliers fall on report of canceled iPhone XR production boost – November 6, 2018
Nikkei claims iPhone XR production cuts, Apple stock drops over 3% – November 5, 2018

18 Comments

    1. … and how much is that 75% (and increasing), worth again? Oh and that 75% is what is helping to make that 25% worth paying for Google too. Its all interlinked.

  1. “MacDailyNews Take: Again, are unit sales figures that no other major tech company offers (or have ever offered) really worth $300 billion in market value?”

    I have no opinion on the matter. There is no room for opinion, we have the fact that it is… Unless it’s not a fact…

            1. But the reporting structure should be causative of the increase. It’s already causative of the decrease. But if there’s nothing else… sure!

  2. Not sure it qualifies as a service, but I’d love for them to expand the Apple Upgrade program from just iPhones to the entire product line

    I started with the 7+ in 2016, moved the the X last year, and just got the XS Max last week to go along with my work XR.

    It’d be a way to keep current (or as current as Apple’s engineers allow) with current technology in laptops and iPads.

  3. When Apple comes up with a service that is NEW and COMPELLING, that is when they can think about becoming a service industry. At the moment their “services” are just undoing their own sabotage. This obsession with “the cloud” has to stop. Internet access is slow, unreliable, complicated, and more vulnerable to hacking then files on a hard drive. What Apple did with Maps is exactly what Microsoft did with Internet Explorer: They used their OS to control their users for no benefit except for themselves.

    1. For most people in US Internet is relatively fast and reliable. Where do you live? I can even get connectivity at 14,000 ft on a mountain via SAT connection and use my iPhone.

      SaaS is here to stay and we’re not reversing directions. Your views about files on a local HD somehow being more secure is antiquated. I trust Apple or my SaaS provider to updated their security vs. trusting my mother remembering to update her software on her computer.

      1. Granted, there is pretty good service in much of the populated USA … but that doesn’t mean that it is priced to be a good value.

        Case in point … some regions are paying $50/month for DSL. They do often have CATV/Fiber as options, but these effectively cost $100/month & up.

        Compared to Europe, these rates are a total rip-off…despite the mantras about how “Capitalism” is supposed to improve the value for consumers: the reality is that we have an Oligopoly which technically is illegal…

          1. Agreed … although unfortunately, the USA’s marketplace has become rampant with technically-illegal {monopolies / oligopolies / monopsonies} which have been systematically ignored by the responsible government regulators … that’s a large part of the reason why we see rampant customer dissatisfaction with Internet/CATV providers, inane rate structures, etc.

            In the meantime, much of Apple’s services are centered around their iOS hardware, which means that this doesn’t really represent diversification from a Corporate risk standpoint.

  4. Apple’s services are generally mediocre.

    Services from a suite of competitors are far better, including and especially Google, though I know that will trigger the pathological hatred of all things Google here.

    1. I dunno, I’ve been pretty happy with Apple’s iCloud and services. Outages are extremely rare and everything just works for me. Even provisioning new devices and transferring info has been a breeze. Doc mgmt stuff isn’t too bad. App Store works great. Find Friends, Find Phone, keychain, Home, etc, etc all work pretty darn good. Could they offer better features? Perhaps but nothing for me is a showstopper.

      Siri seems to need help, I’ll give you that. She routinely starts talking on our home pods when nobody’s talking to her. But I’ll take that vs. Siri collecting personal info all the time and sharing it.

      I use Google extensively for work because I have to. For the few things Google does better I have to give up privacy and they’ve abandoned so many apps/services over the years its awful.

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