Brian Sozzi for Yahoo Finance:
The Apple iPhone army could prove to be a powerful force in the tech behemoth making some serious cash from streaming content.
Wedbush tech analyst Dan Ives tells Yahoo Finance Apple could amass an astounding 100 million customers to its recently launched Apple TV+ streaming service within the next four years. With an installed base of iPhones of more than 900 million, Ives thinks it’s fair to say a good chunk of people could get swept into Apple’s original streaming content.
After all, Apple TV+ is featured prominently on the iPhone home screen and the $4.99 price is insanely affordable — especially when stacked up against the $12.00-plus for Netflix… “In my opinion if Apple is successful, it adds $15 to the share price,” Ives contends.
MacDailyNews Take: As we wrote last month, “Apple TV+, at just $4.99 per month, doesn’t have to disrupt Netflix et al. by taking subscribers; it’s additive. Most people who already subscribe to Netflix will simply add Apple TV+, not drop Netflix for it. Many, tens of millions in the first year alone, will get Apple TV+ for free with the purchase of any iPhone, iPad, Apple TV, iPod touch, or Mac!”
Apple TV+ will have multiple series that build a following the size of which will quickly surprise most observers.
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
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
It would be interesting to see if after massive growth at almost no cost to viewers, Apple might plan to have a free option subsidies by ads? Apples ad agency division of course?
Yet another example of Apple NOT playing by the same rules as the completion. Apple’s game is to sell hardware products and provide services to enhance customer experience with those hardware products. So, if Apple eventually breaks even on Apple TV+, mission accomplished. It’s another big motivator for customers to keep buying Apple hardware. If Apple TV+ makes a profit, bonus points! For most of the competition, the service MUST be significantly profitable to succeed.
That’s why $4.99/month (or free for a year with eligible hardware purchase) is possible. The completion isn’t just playing by different rules as Apple, it’s not even the same game.
For me, the cost for Apple TV+ is less than $4.99 because I buy and redeem iTunes gift cards. Usually $85 for $100 store credit, occasionally $80 for $100. Monthly fees for ALL digital content deducted from my balance. And I don’t have numerous small credit card charges to review. Probably helps Apple too by reducing expense of many small charges to collect fees.
What part of the author’s ass did he pull out $15 as the value of TV+. So far AAPL has added over 105 basis points this year to date. Wild guessing what TV+ will add is just absurd and it illustrates why no one should be listening to analysts. Apple TV+ is the start of something that will grow well beyond the pea brained analysts view. No matter how many times it happens, analysts seem incapable of understanding the difference with AAPL and typical businesses. Apple spent years in it’s often derisively mocked “walled garden” connecting the dots between its various products to build an integrated ecosystem that its customers LOVE! Other companies scramble to copy pieces of it, but can never do the whole deal, because they go for the quick buck Wall Street seems to be bling-blinded by. The ecosystem now builds and iterates itself while AAPL goes from a pc to a music player to a mobile phone, to a graphic tablet, to a wearable, to an entertainment company, while disrupting one industry after the next. Who knows, where we go from here. Certainly no analyst has a clue. They haven’t even noticed that over two years ago, Apple became an energy company and one of the greenest companies in the world. Steve taught the company how to “skate to where the pucks going.“ Cook helped codify that philosophy and put a lot more pucks into play with a deep bench of prescient skaters in quick pursuit. Apple TV+ will make a lot more basis points than 15, as it morphs into God knows what! Get ready for Mr. Toad’s wild ride!
Well thought out and well said! Kudos, You nailed it.