Apple analysts see potential in expanding services but want more info

“Apple Inc. analysts are cautiously optimistic about the company expanding its services business, a move they see as offering long-term growth potential,” Jeran Wittenstein and Ryan Vlastelica report for Bloomberg. “However, Monday’s big media event was seen as lacking key details, and even bulls say it will take a few years for the products to have a material impact on revenue or earnings.”

“Big picture, this strategy aligns with our thesis that Services, not devices, hold the key to Apple revenue and profitability growth over the next 5 years.” However, while the breadth of the services that were launched was “impressive,” the lack of pricing detail makes it difficult to evaluate the financial impact. — Katy Huberty, Morgan Stanley

The event was “materially different” than expected, as it had anticipated the TV service to be available immediately, and for more pricing details to be announced. — Rod Hall, Goldman Sachs

Read more in the full article here.

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  1. The best ways to develop and deliver services are if they are available for and apply to all of Apple’s global customers, and not just a subset of special interest groups.

    To only launch products and services applicable/available to the US market, will make the rest of the base feel like being invited to a birthday party and being denied the cake. It also leaves them wondering how much they paid for the party.

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