© Stocksak. Apple’s (AAPL), is Building a Streaming Service ‘Best-In Class’ – Evercore ISI
By Sam Boughedda
Evercore ISI analysts stated that Apple (NASDAQ: ) raising subscription prices could increase annual services revenue by around $1.8 billion.
On Monday, the tech giant revealed that Apple Music, Apple TV+ and the Apple One bundle which includes both those services, has been increased in price.
“Assuming 100M Music subscribers, and 25M TV+ subscribers, this move could add approximately $1.8B annually in services revenue. The price increase for Apple Music is more of a pass through of higher licensing costs, but the TV+ increase appears to be a reflection of the services’ success,” wrote the analysts, who have an Outperform rating and $190 price target on Apple shares.
Analysts stated that the price rise is evidence that Apple is organically creating a premium streaming service.
“The price hike is also well timed, as Apple just released the second season, critically acclaimed, of Acapulco. Over the next 6-9 month, we expect new seasons for some of their most popular shows, including Ted Lasso and Severance. TV+’s pricing is still below that of Netflix, HBO and Hulu, but this is due to its limited content library. The analysts said that Apple has done a great job in building out their content library. However, they should become more competitive in terms the available content over the next 3-5 year as long as they maintain their impressive hit rate.”