Apple’s Services division alone would be worth up to $450 billion as its own company

“If Apple spun off its Services division as its own company, the business would be worth between $400 billion and $450 billion, according to a new analyst report,” Luke Dormehl writes for Cult of Mac. “To put that number in perspective, it’s more than twice the value of Netflix — and only $100 billion less than Facebook.”

“Aside from the staggering Services valuation, Wedbush analyst Dan Ives’ latest note to clients also suggests that Apple has stabilized after a turbulent 2018,” Dormehl writes.

“He notes that Apple’s ‘pricing hubris’ with the iPhone XR hurt the company in China,” Dormehl writes. “However, Apple’s price cuts began the slow process of turning things around in the key Asian country.”

Read more in the full article here.

MacDailyNews Take: Apple’s services is a monster business and The Street is finally waking to that fact!

14 Comments

  1. You talk about spin. It goes to zero as people decide to buy other platforms cause Apple pricing is as crazy as donald and Apple is way to slow to upgrade computers. Hey, don’t give me that slow is better foolishness. Yes, I’m gone, when theses devices I have fail, like my macbook pro, I’m looking elsewhere at least for 5 years. magsafe and the keyboard are why I bought a pro to start with, but I can’t justify buying a new one base on price and features, speed, display, or OS. Microsoft may not be great but they are definitely getting better. And apple is just not in the computer business ant more. Worst yet is a computer (with services) company using Amazon to provide services which it should be able to build and provide. MAN STEVE! you are truly missed.

    1. bye bye BOB enjoy your new junk we will see you back in a few years… you should probably grab one of those new galaxy fold’s i hear they extremely cutting edge and they will be upgrading it any day now since the first ones dont work!

  2. The Street still has a long way to go.

    Apple is still trading at a seriously low multiple, with a P/E of about 16-18.

    To put that in perspective, if we valued “Apple’s future” as we do Google or Microsoft (used the same P/E) Apple would be worth $2 trillion today.

    1. It is crazy that any company trading at any multiple above 1.5, 2 with great speculation. Why? Simple none of the companies are generating 16 -17 times their stock price in earnings.

      This is why the crazy want to play with your social security money in the stock market. Too few companies lot of demand drives up the stock price.

      1. You just described an aspect of radical, unrepentant Wall St. Capitalism which some entity needs to tame before it devours the social safety net.

    2. It’s somewhat insulting to me how Microsoft, Amazon and Google are valued far more highly than Apple, but it’s possible Apple’s business simply isn’t very solid. iPhone sales come and go and they seem to be declining with no hope of recovering. Apple bet too heavily on a single product and lost. Any rumors of weak iPhone sales and Apple’s value quickly collapses. It just a lousy deal for Apple shareholders unless an investor can afford to buy more Apple shares on each dip. Unfortunately, I can’t do that as a retired person on social security.

      I truly don’t understand why Apple is so slow in upgrading computers while other companies easily do so. CPU and GPU upgrades every two years seems like a reasonable amount of time, but four or five years is just ridiculous for a company with Apple’s resources.

  3. How ridiculous is that $450B figure? Plenty ridiculous. Apple’s services will never be worth that much to Wall Street. Currently, Apple shareholders are lucky the stock has a multiple of 16.x or so. All the other major tech companies have P/Es much higher than that.

    Tim Cook isn’t trying to grow Apple like most of the top CEOs are doing. I think Apple should be spending the money (at least half of it) it’s using for buybacks on creating growth for the company. That’s just my personal opinion as I’m no financial genius. I simply want Apple to become more diverse and stop depending upon iPhone sales to carry the company. Apple should definitely have purchased a cloud business as that’s where all the growth seems to be. Apple could easily have afforded to do so but let the opportunity slip by.

  4. Apples only product is NOT iphone so please people stop saying it. The average NET margin is 38-38.5% thats across all of their product lines. Do people really just not read anymore? Airpods will sell 60-90m units this year (ming kuo whatever). Apple watches will ship 30m units this year. Macs will ship over 20m units this year. Ipads will ship over 30m units this year.

    Let me put that into perspective for all you “apple sucks, they don’t update, they don’t innovate” people out there. The entire samsung galaxy line will sell less than 20m units this year. Google pixel wills sell less than 3 million units this year. The galaxy tab (if they even exist anymore) will ship less than 3 million worldwide. The samsung gear smart watch…. again less than 3 million units this year. The apple watch sells more units than the mi band which retails for 15.00-20.00 on a 2% margin. The combined total of smart watches and fitness trackers will ship…. combined….. less than the apple watch.

    These are just tidbits of information so often glossed over by the fact that iphone slipped from 250 million to 240 million units for the year. Grow up people every other company in the world who makes consumer products would sell the farm to be apple but they cannot (lord knows they have all tried).

    Add to this unbelievable amount of Ultra Premium Sales the fact that they have an ecosystem baked in which makes them all work together, relatively safely, and i do not see them losing anytime soon. Apple is almost never first to a segment but they always revolutionize it when they enter. The bring products which work like your would expect them to where others just bring products wrought with flaws so they can say “we are first and we innovate” Take for example the homepod…. everyone though apple was lete to the game with homepod and admittedly 2 years ago siri was far ebhind google and amazon… come to find out they had been doing R&D for 3 years prior to amazons release on this product. The issue often with apple is for them to release or update a product the economies of scale but be present to allow this to happen. Unlike google or samsung who only need availability in a few million units of a product to release it apple needs the ability to scale to 20-50million units of a technology before they can even fathom to release that technology to the masses (for example LED screens).

    wake up people we are seeing the demonstration of continued dominance something the likes of which haven’t been seen in 20+ years especially when we consider the diversification of their products and services.

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