Apple Card partner Goldman Sachs says Apple's new video, game & news services will have 's...

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in AAPL Investors
Analysts from Goldman Sachs and Oppenheimer are expressing skepticism about the services Apple announced on Monday, even though the former is a partner on the Apple Card.

Apple TV+ announcement


Services revealed at the event were "materially different than we had anticipated," said Goldman Sachs' Rod Hall. He noted that Apple TV+ has a broad "fall" launch date with no pricing, and the same can be said for its App Store gaming subscription, Apple Arcade. Likewise there was no word of a rumored Amazon Prime-style bundle, though Hall noted that Apple might simply be waiting until all its services are ready.

"Though all of these services are interesting from a platform churn point of view none seem likely on our calculations to materially impact EPS [earnings per share] in the short term, with the possible exception of Apple Arcade pending pricing and service details," he continued.

"With small calculated impacts from these 'Other services,' we expect the focus to return to the slowing iPhone business post this event," he concluded. The analyst's memo didn't make mention of the Apple Card, presumably because of foreknowledge and/or possible conflicts of interest.

Oppenheimer's Andrew Uerkwitz suggested that the new services -- Apple Card included -- "provide better solutions to solve relatively niche problems in media business," and that they "may prompt existing iOS users to stay more invested in Apple's ecosystem," something hinted at in Hall's "platform churn" comments. People using services like the App Store and Apple Music, for example, may be less inclined to switch platforms, since they would lose their paid app libraries and the latter's deep OS integration.

Pricing for Apple TV+, the company's original video content, is "one of the biggest unanswered questions," Uerkwitz said.

The company will have to compete with Netflix which charges $12.99 for its standard plan, and Hulu, which charges $11.99 for an "ad-free" subscription. An ad-based subscription is $5.99, or completely free with an individual Spotify Premium account.

Amazon Prime Video is $8.99 per month, or free with a full-fledged Prime membership, which costs $119 per year.

Comments

  • Reply 1 of 20
    MacProMacPro Posts: 18,293member
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    SpamSandwichwatto_cobra
  • Reply 2 of 20
    ...If only Goldman Sachs and other ’analysts’ would have a just a small impact on the price of Apple’s shares from time to time... Instead of the FUD  re: Apple that is tended to be spread by their ilk...
    ’Doomed!’
    watto_cobra
  • Reply 3 of 20
    macxpressmacxpress Posts: 4,896member
    I love it when people STILL to this day underestimate what Apple can do when it enters a space. Maybe they don’t get it right the first time but they’ll make it right and when they do all the naysayers disappear and companies who shrugged Apple off start scrambling. 
    edited March 26 Soliwatto_cobra
  • Reply 4 of 20
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    designrflyingdp
  • Reply 5 of 20
    SoliSoli Posts: 8,966member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    1) No he wouldn't. I'm interested in a lot of the stuff they're working on.

    2) There was a lot more mentioned yesterday than just original video content.
    randominternetpersonrepressthiswatto_cobra
  • Reply 6 of 20
    macxpressmacxpress Posts: 4,896member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    You sound like Steve Ballmer....
    Solipscooter63MacPromacplusplusrandominternetpersonkruegduderepressthisfrantisekwatto_cobra
  • Reply 7 of 20
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 166unconfirmed, member
    This will be successful in the long run,

    But short term I don't think the impact will be big. 

    When they release a bundled offer with:

    All plus services, arcade, iCloud and apple music,

    Thats when success will happen. 

    I would buy it without hesitation.
    watto_cobra
  • Reply 8 of 20
    SoliSoli Posts: 8,966member
    This will be successful in the long run,

    But short term I don't think the impact will be big. 
    1) Short term you don't see News+ or Card being successful? I don't see those as being part of a required bundle to be successful.

    2) All I've ever heard people complain about with cable/sat TV is that they have to pay for bundles for content that they don't want, but now we not only want our tv networks bundled (again), but want that stuff bundled with a music service, a gaming service, a video service, original content access, iCloud storage, curated news, and a credit card? How is that better? What I only want News+ (which I think will be successful by itself)?
    repressthiscaladanianwatto_cobra
  • Reply 9 of 20
    The answer is will it make Apple money, and the answer is it sure as heck will.
    Will they be as popular as competitors or replace other peoples means for buying magazines and games, it certainly won't on day 1, and I don't see Apple TV+ being half as popular as Netflix or the news service being used by 10% of Apple users, but that may just be me underestimating.
    watto_cobra
  • Reply 10 of 20
    MacProMacPro Posts: 18,293member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    I will sign up for sure, looking forward to Spielberg's series.
    watto_cobra
  • Reply 11 of 20
    Shocking.... 
  • Reply 12 of 20
    LatkoLatko Posts: 398member
    The answer is will it make Apple money, and the answer is it sure as heck will.
    Will they be as popular as competitors or replace other peoples means for buying magazines and games, it certainly won't on day 1, and I don't see Apple TV+ being half as popular as Netflix or the news service being used by 10% of Apple users, but that may just be me underestimating.
    Agree. But that’s not relevant for Tim. These services will be pure cash burners from day 1, but cross-subsidisation will make them possible and cross-financing (staffing, office, licenses, server, bandwidth) via the holding will obscure that so Tim can call it a “huge success” anyway. Just like Apple Music that - as Jimmy Iovine conceded - can’t exist by itself. It’s investors incentives that wil finance this via stock price - as all FAANG companies do. And if those investor perspectives cease to exist, so will Apple
    edited March 26 curtis hannah
  • Reply 13 of 20
    Latko said:
    The answer is will it make Apple money, and the answer is it sure as heck will.
    Will they be as popular as competitors or replace other peoples means for buying magazines and games, it certainly won't on day 1, and I don't see Apple TV+ being half as popular as Netflix or the news service being used by 10% of Apple users, but that may just be me underestimating.
    Agree. But that’s not relevant for Tim. These services will be pure cash burners from day 1, but cross-subsidisation will make them possible and cross-financing (staffing, office, licenses, server, bandwidth) via the holding will obscure that so Tim can call it a “huge success” anyway. Just like Apple Music that - as Jimmy Iovine conceded - can’t exist by itself. It’s investors incentives that wil finance this via stock price - as all FAANG companies do. And if those investor perspectives cease to exist, so will Apple
    LOL.  So it's "investor perspectives" that are keeping Apple solvent?  Not the hundreds of BILLIONS of dollars in profits Apple generates each year?
    Solirepressthiscurtis hannahLordeHawkwatto_cobra
  • Reply 14 of 20
    kruegdudekruegdude Posts: 340member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    A bit short sighted there. Or maybe there’s an agenda not associated with reflective thought that would contribute to the interchange of ideas here. 
    repressthisbestkeptsecretwatto_cobra
  • Reply 15 of 20
    kruegdudekruegdude Posts: 340member

    Analysts continue to be confused by the directions Apple takes. Falls back to the comfortable, smoke filled, back room good old boy ways of thinking. 

    watto_cobra
  • Reply 16 of 20
    LatkoLatko Posts: 398member
    Latko said:
    The answer is will it make Apple money, and the answer is it sure as heck will.
    Will they be as popular as competitors or replace other peoples means for buying magazines and games, it certainly won't on day 1, and I don't see Apple TV+ being half as popular as Netflix or the news service being used by 10% of Apple users, but that may just be me underestimating.
    Agree. But that’s not relevant for Tim. These services will be pure cash burners from day 1, but cross-subsidisation will make them possible and cross-financing (staffing, office, licenses, server, bandwidth) via the holding will obscure that so Tim can call it a “huge success” anyway. Just like Apple Music that - as Jimmy Iovine conceded - can’t exist by itself. It’s investors incentives that wil finance this via stock price - as all FAANG companies do. And if those investor perspectives cease to exist, so will Apple
    LOL.  So it's "investor perspectives" that are keeping Apple solvent?  Not the hundreds of BILLIONS of dollars in profits Apple generates each year?
    Still the case (+ accumulated wealth)
    But falling iPhone sales numbers & analyst sentiments about that have completely changed the outlook/game.
    Share price does LESS reflect profits & accumulated wealth, relative to other companies, complicating their perceived sustainability
    I am NOT saying they have problems with their business model, but they do have problems selling that to the outside world/analysts
    edited March 26
  • Reply 17 of 20
    jungmarkjungmark Posts: 6,705member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    You in 2007: do you know anyone that wants a keyboardless cell phone that can't copy/paste?

    You in 2010: do you know anyone that wants an oversized iPhone but without the talking parts?!

    You in 2015: do you know anyone that wants a computer for their wrists?

    If you build it, they will come. 
    Solimacxpresswatto_cobra
  • Reply 18 of 20
    jungmarkjungmark Posts: 6,705member
    Latko said:
    Latko said:
    The answer is will it make Apple money, and the answer is it sure as heck will.
    Will they be as popular as competitors or replace other peoples means for buying magazines and games, it certainly won't on day 1, and I don't see Apple TV+ being half as popular as Netflix or the news service being used by 10% of Apple users, but that may just be me underestimating.
    Agree. But that’s not relevant for Tim. These services will be pure cash burners from day 1, but cross-subsidisation will make them possible and cross-financing (staffing, office, licenses, server, bandwidth) via the holding will obscure that so Tim can call it a “huge success” anyway. Just like Apple Music that - as Jimmy Iovine conceded - can’t exist by itself. It’s investors incentives that wil finance this via stock price - as all FAANG companies do. And if those investor perspectives cease to exist, so will Apple
    LOL.  So it's "investor perspectives" that are keeping Apple solvent?  Not the hundreds of BILLIONS of dollars in profits Apple generates each year?
    Still the case (+ accumulated wealth)
    But falling iPhone sales numbers & analyst sentiments about that have completely changed the outlook/game.
    Share price does LESS reflect profits & accumulated wealth, relative to other companies, complicating their perceived sustainability
    I am NOT saying they have problems with their business model, but they do have problems selling that to the outside world/analysts
    These are the same analysts that buried the iPad, watch, airpods. The same analysts that are waiting for Apple netbooks. The same analysts that say Apple is doomed if they don't do so and so. 
    watto_cobra
  • Reply 19 of 20
    sandorsandor Posts: 523member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    If it is like Netflix "Originals", it just means, 98% of the time, it is a show from over seas that they bought distribution rights for.
    watto_cobra
  • Reply 20 of 20
    zoetmbzoetmb Posts: 2,453member
    MacPro said:
    I'm sure they will be tiny revenue earners just like all Apple's other non-iPhone divisions /s 
    Do you know a single person anywhere in the world that is even remotely interested in paying for Apple's original video content? Because you'd be the first.

    You sound like these guys:

    John C. Dvorak, 1984

    “The Macintosh uses an experimental pointing device called a "mouse". There is no evidence that people want to use these things. I don’t want one of these new fangled devices."

     former Apple VP Gaston Bastiaens, January 1996.

    “Within the next two months, Sony will acquire Apple. … Sony will be the white knight who will step into the picture."

     Michael Dell, October 1997

    "I'd shut [Apple] down and give the money back to the shareholders."

     Hiawatha Bray, Boston Globe, 1998.

    "The iMac will only sell to some of the true believers. The iMac doesn’t include a floppy disk drive for doing file backups or sharing of data. ... The iMac will fail. 

    10/5/2000   Michael S. Malone

    Apple R.I.P.

    “Nevertheless, the bloom is off the rose. The incredible run-up Apple stock has enjoyed since Steve's return is over, and the sheen of success that had enveloped the company has been tarnished. 

    A temporary setback? Don't be too sure. Unlike, say, Hewlett-Packard, Apple has always been a company that deals poorly with failure. When things go bad at Apple, they go very bad. “

    5/21/2001  Cliff Edwards  

    Commentary: Sorry, Steve: Here's Why Apple Stores Won't Work 

    “New retail outlets aren't going to fix Apple's sales “

     

    12/23/2006 Bill Ray (Mobile)

    “Why the Apple phone will fail, and fail badly”

    It's the Pippin all over again”

     

    1/14/2007 Matthew Lynn

    Apple iPhone Will Fail in a Late, Defensive Move

    “…Don't let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyjand Motorola Inc.won't be whispering nervously into their clamshells over a new threat to their business…

    The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant”

     

    3/28/2007 John Dvorak

    Apple should pull the plug in the iPhone

    Commentary:  Company risks its reputation in competitive business

    … Now compare that effort and overlay the mobile handset business. This is not an emerging business. In fact it's gone so far that it's in the process of consolidation with probably two players dominating everything, Nokia Corp…and Motorola Inc.” 

    SoliLordeHawkwatto_cobra
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