Morgan Stanley: Apple’s TV service will be a $9 billion business within 5 years

Ahead of launch on November 1st, Morgan Stanley analysts estimate Apple TV+ could be a $9 billion-per-year business by 2025, even with conservative sign-up estimates.

Kif Leswing for CNBC:

Growth in Apple’s services business will hit 20% next year, boosted by its new Apple TV+ streaming service, Morgan Stanley analyst Katy Huberty predicted in a note distributed on Tuesday…

The predicted strength of Apple TV+, as well as Morgan Stanley’s belief that iPhone sales will return “to growth as replacement cycles peak,” is why Morgan Stanley raised its price target for Apple stock to $289 from $247, a 17% increase.

“With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25,” Huberty wrote… “With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020.”

MacDailyNews Take: Are we witnessing a modern-day miracle? Is Wall Street finally getting it?

Apple TV+ will be a massive success and, at $4.99/month, if Apple just leaves the price alone for three years, the company will have 100+ million paying subscribers with 36 months from launch. — MacDailyNews, October 23, 2019

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