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🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data
Apple is Building a 'Best-In-Class' Streaming Service - Evercore ISI
© Reuters. Apple's (AAPL) is Building a 'Best-In-Class' Streaming Service - Evercore ISI
By Sam Boughedda
Evercore ISI analysts said Apple (NASDAQ:AAPL) raising subscription prices could add around $1.8 billion in annual services revenue.
On Monday, it was revealed the tech giant has raised the price of both Apple Music and Apple TV+, as well as the Apple One bundle that includes both of those services.
"Assuming 100M Music subscribers and 25M TV+ subscribers this move could add around $1.8B in annual 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.
The analysts added that the price increase adds to the firm's conviction that Apple is organically building a "best-in-class premium" streaming service.
"The price increase is also thoughtfully timed as Apple recently released the second season of the critically acclaimed Acapulco and over the next 6-9 months we expect new seasons of some of their biggest shows including Ted Lasso, Severance, and Mythic Quest. The price of TV+ remains below peers like Netflix, HBO, and Hulu, but this is simply a reflection of the limited content library. Apple has done a good job of building out their content library, but over the next 3-5 years they should become far more competitive in terms of available content as long as they can maintain their impressive hit rate," added the analysts.
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