Jefferies: Apple’s streaming video service may not help reaccelerate growth

“Apple Inc. appears ready to launch its long-awaited video streaming service in the spring, but Jefferies analyst Tim O’Shea isn’t yet convinced that the efforts will help Apple achieve an inflection in growth,” Emily Bary writes for MarketWatch.

“‘Even with video, services growth is not enough to offset iPhone unit declines, which should persist through 2019 and beyond,’ he wrote,” Bary writes. “‘The 30% revenue share could reduce the amount of third party video content in this service, limiting its potential,’ O’Shea said, though it’s still not clear exactly what the company’s revenue-sharing arrangements for the video service will be as the company has yet to announce the offering.”

“While publishers like Netflix are rebelling against Apple’s 30% cut of App Store revenue, the largest app there only accounts for 0.3% of total services revenue,” Bary writes. “‘For video, if a single major producer pulls out it would be a much bigger problem,’ O’Shea wrote.”

Read more in the full article here.

MacDailyNews Take: If O’Shea’s ifs and buts were candies and nuts, we’d all have a merry Christmas.

iCal’ed for future reference.

Apple likely to unveil TV streaming service at star-studded event on March 25th – February 15, 2019
Apple is targeting April to launch its new video service – February 13, 2019
Apple to hold special media event on March 25th – February 12, 2019


      1. That, of course, is Zeroloser… or some similar pathetic hatebois. One way to tell is the poor sentence structure.

        Thanks for your startling insight and such a valuable contribution to the discussion. Sure would miss you – sooooo much – if MDN were to delete all the empty crap that infests these page.

  1. “‘Even with video, services growth is not enough to offset iPhone unit declines”

    Simply and bluntly put (sorry), it’s the price stupid!
    Tim Cook, please throw away your calculator and get serious. It’s not just the numbers but the image of greedy and arrogant Apple that is profoundly damaging the business. Put your ears on the ground and listen to the voice of customers (running away fading). They are the ones who have been telling the truth, not the analysts.

    1. When someone used the old “greedy” and “arrogant”, they probably are not going to be making any worthwhile points.

      And customers running away… If a few of you hateboys ran away, that would be great. That would leave all the other hundreds of millions who think Apple and its products are MUCH better than any alternative. By all means, piss off and go have fun with Android and Windows.

      1. Even as an Apple shareholder, I think Apple isn’t trying to put its products in enough consumers’ hands by charging so much for them. Market share is still the most important metric for Wall Street and Apple is definitely losing smartphone market share.

        I’m not a financial expert so I can’t say that Huawei is profiting from gaining all that market share. I don’t think Huawei’s market share gains will be sustainable, but the news media doesn’t care, so they praise Huawei endlessly.

        I do see how Android smartphone numbers are growing at a staggering rate and Apple has nothing to answer with in countries such as China and India. I think Apple can be viewed as greedy and arrogant in that context. Apple products aren’t affordable enough for the masses, so most consumers around the world will never get to own an Apple product.

        I’m not a hateboi but I am concerned how Apple seems to be pricing itself out of many markets. If Apple’s books are in the black, then all is well and good for the company. It’s just that Wall Street isn’t satisfied with that minimal approach and Apple quickly falls in value which hurts shareholders.

        Microsoft is running rings around Apple in terms of overall value and I find it somewhat embarrassing as a loyal Apple shareholder. I feel there must be something Apple is doing wrong for that situation to exist.

        1. Maybe Apple’s strategy may lead to a similar “Galapagos Effect” Japan’s mobile phones went through the 90’s and early 2k. Services income has the best chance of succeeding the more devices use that service and market share is a big part. Apple’s pricing somewhat works against any sudden increase and with ‘good enough’ feature gap always closing from the Android device camp, it is possible maket share could shrink in the future.

      2. Haha, Don’t be reactionary. I am not an Apple hater but an enthusiast for life. I just feel Apple is becoming desperate, and some negative things said about Apple lately are true. I do not turn my ears away just because they are negative. If you do not think people (at least some) are not running away (not necessarily means they are abandoning the ship), all you have to do is to take a look at the recent performance of Apple. People are not buying, not upgrading, buying other brands to take care of their immediate needs etc etc. The truth hurts but we have to keep watchful eyes if we truly love Apple and its products.

      1. @Sean
        I just posted my reply to you before I saw your “post-posts”. No problem whatsoever. I too get cantankerous once in a while (or all the time, lately?) when I feel frustrated by Apple. But we are not fighting a war, just arguing over mundane things. People here are arguing, posting their opinions negative and positive vigorously, but I am finding they are very well informed and matured, compared wiith….. lol

  2. It’s probably true that Services is not going to compensate for losses in iPhone sales as we don’t really know how much further iPhone sales will fall. I think it’s in Apple’s best interest to find a couple of more revenue streams as a backup. I don’t know if doing something like that is easy or not. I simply feel that analysts and big investors aren’t going to let Apple make a smooth transition from being a hardware company to a Services company. It seems as though Apple, despite being a hardware company, is going to lose on the home front to the likes of Amazon and Google.

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