Many Apple investors still underestimate the growth potential of services, a Wall Street analyst says. Apple Services could be worth $100 billion annually by 2024, Evercore ISI analyst Amit Daryanani said in a note to clients Thursday.
Patrick Seitz for Investor’s Business Daily:
“The potential for new offerings to be an accelerant to services growth remains underappreciated,” Daryanani wrote.
Apple’s services revenue growth will be fueled by new offerings and higher average revenue per user, not a larger installed base of total users, Daryanani said. In contrast, services growth over the last five years was driven mostly by a larger installed base, he said.
“We see health care, cloud and advertisements as driving the next leg-up for growth,” Daryanani said.
“We think services can sustain a compound annual growth rate of about 19% through fiscal 2024,” he said. That would translate to over $100 billion in services revenue by fiscal 2024… He sees Apple Music, Apple Pay, Apple Arcade and Apple TV+ as key growth drivers for the next five years.
MacDailyNews Take: No mention of Apple News+, unsurprisingly. If Apple can get some bundles going or, even better, an “Apple Prime” super bundle, that’ll boost underperforming services like News+ and Services overall that much more!
Services are where it’s at.
Apple w/o revolutionary products is a story gone awry. The income of services is predictable and the ROI is fantastic, but the “device” is an ecosystem “hook.”
And…AirPods and A-Watch aren’t what I’m thinking about.