© Reuters. Bernstein Believes Apple TV+ (AAPL) will ‘Doubtless By no means be Materials Financially’
By Sam Boughedda
Bernstein analyst Toni Sacconaghi believes that Apple’s (NASDAQ:) streaming service will doubtless by no means be materials financially for Apple.
In a be aware to purchasers Monday, Sacconaghi defined that up to now, Apple’s streaming service has differed from its friends, with restricted content material which is principally unique however per Apple’s model — top quality. As well as, it’s inexpensively priced at $5/month or $50 per 12 months.
“Given Apple’s basically non-existent disclosures round Apple TV+, gaining conviction behind the whole variety of subscribers and content material spending figures is hard. Having mentioned that, we thought of third social gathering estimates and our personal backside up evaluation and conclude that Apple could have 20 – 40M paying subscribers, annual revenues of $1-$2B, and annual content material spending of ~$3B+,” wrote the analyst. “Whereas free trials and accounting concerns cloud the monetary influence of Apple TV+ to Service’s profitability, we consider {that a} ‘true’ P&L (assuming no free trials) would recommend an working earnings lack of ~$1B in 2021 (~1% of whole firm), and probably ~$2B on a money foundation.”
Consequently, Bernstein mentioned, “Apple TV+ will doubtless by no means be materials financially for Apple in and of itself, however it’s a further subscription-based income stream that may assist its Companies enterprise develop, and is a robust bundling automobile – given the marginal price of a free subscription is actually zero.”
The analyst maintained a Market Carry out score and $170 worth goal on Apple.
