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Wall Street calls Apple event a dud: 'Expect the focus to return to the slowing iPhone business'

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Analysts were left with more questions than answers about Apple's new services that were unveiled at a press event.

The new services announced Monday include Apple News+, Apple Card, Apple Arcade and Apple TV Channels.

"Apple's services reveal was materially different than we had anticipated," said Goldman Sachs analyst Rod Hall. "With small calculated impacts from these, 'other services', we expect the focus to return to the slowing iPhone business post this event," Hall said.

Shares of the stock declined after the event but were up over 1.6% at the open.

"Overall, it appears that Apple's new services provide better solutions to solve relatively niche problems in media business and they may prompt existing iOS users to stay more invested in Apple's ecosystem," Oppenheimer analyst Andrew Uerkwitz wrote in a note to clients after the event.

"Pricing of Apple TV Plus is one of the biggest unanswered questions we have after the event," Uerkwitz added.

Here's what else analysts are saying about Apple's event:

Goldman Sachs- Neutral rating

"Apple's Services reveal was materially different than we had anticipated. ... The Apple TV+ service which we expected to be available now was only previewed for Fall availability with no pricing information. ... Apple also previewed an Arcade gaming subscription service but again for Fall availability with no pricing information. ... The News service announced was as we had expected and is the only Service announced that is available immediately ... Finally, Apple offered no Services bundle to compel users to sign up now though this is still a possibility for the actual launch this fall... Though all of these services are interesting from a platform churn point of view none seem likely on our calculations to materially impact EPS in the short term, with the possible exception of Apple Arcade pending pricing and service details... Apple's Services line remains dominated by App Store commissions and TAC revenue which, when combined, made up 51% of total 2018 services revenue and 70% of Services gross profits... With small calculated impacts from these "Other services", we expect the focus to return to the slowing iPhone business post this event."

Oppenheimer- Perform rating

"Apple revealed new media subscription services including Apple News Plus (magazine), Apple Arcade (mobile game), and Apple TV Plus (TV and movie streaming)...Apple also announced Apple Card, a reward credit card tightly integrated with Apple Pay. On first look, the new subscription services seek to aggregate media content in similar models to existing offerings on the market... Apple claims to differentiate with easy-to-navigate user interface, better privacy protection and security, human curation of content, personalization enabled by on-device machine learning, and free sharing among family... Apple News Plus is immediately available while other services will launch later in 2019... Pricing of Apple TV Plus is one of the biggest unanswered questions we have after the event... Overall, it appears that Apple's new services provide better solutions to solve relatively niche problems in media business and they may prompt existing iOS users to stay more invested in Apple's ecosystem..."

Morgan Stanley- Overweight rating, price target to $220 from $197

"Big picture, this strategy aligns with our thesis that Services, not devices, hold the key to Apple revenue and profitability growth over the next 5 years... However, the lack of specifics around pricing and timing limits us from raising estimates today...We still believe Apple is likely to bundle hardware/services and/or multiple services over time, with our September 2018 analysis suggesting Apple could generate $22-37B in revenue by 2025 for an Apple Media bundle alone, up from $3.8B in 2018... While we keep our estimates unchanged today, we mark our sum of- the-parts (SoTP) driven price target to market, which captures the re-rating of Hardware and Services peers over the last 2 months, resulting in our new price target of $220 (from $197 prior)...Remain OW..."

Bank of America- Buy rating

"Given some of these services are not available until the fall, it is surprising that Apple chose to schedule this event in March. Release dates and pricing for Apple Arcade and Apple TV+ were not announced, potentially because it is still working towards pricing agreements... In our opinion, pricing (and possible bundling of services) would in large part determine adoption rate..."

PiperJaffray- Overweight rating, price target to $201 from $187

"We believe the primary takeaway from today's event is that Apple is increasingly looking for ways to leverage the massive (~1.4B) base of active installed devices by layering on more services per user/device... As upgrade rates for Apple devices have lengthened and the predictability of new iPhone uptake has become more challenging, the company is pushing high margin and highly recurring services offerings... As such, in addition to today's announcements of various new & updated video services, Apple announced Apple News+, Apple Card, and Apple Arcade... We estimate TTM services revenue per active installed device grew 19% y/y in FY18 and Apple is layering on new services to drive strong growth of this metric for years to come. Maintain OW on AAPL, PT to $201..."

J.P. Morgan - Overweight rating

"Apple's event yesterday focused on launch of services and offered more breadth than investors expected, but at the same time it failed to offer the same depth that investors would have liked to see to position each category for success... Particularly with expectations being high relative to the launch of a video subscription, the launch of Apple TV+ as a pure aggregator, with little value for users outside of the convenience of access to all subscriptions through one application, likely left investors disappointed on the value proposition that would allow it to compete effectively against large streaming players despite being a late entrant in the market... However, on the positive side, while there were limited expectations for announcements beyond video, Apple went on to launch a news and magazine subscription service (Apple News+), a credit card (Apple Card), and a gaming service (Apple Arcade). Most incremental and differentiated to us appears to be the positioning of Apple Card, while Apple Arcade is also favorably positioned given limited similar services on offer... At the same time, we believe Apple News + fails to offer much additional functionality and is merely the integration of Texture's functionality into News from the perspective of an end-user..."

Citi- Buy rating

"Apple hosted an event at its HQ which can best be summarized as a boost to every angle of its services. Below we summarize the enhancements with our view on them... We maintain our Buy rating on APPL shares with $220 TP... We do not believe today's announcement is a major catalyst for the shares as consumers are slow to change their behavior... However, we do see the next catalyst as the upcoming company earnings and capital deployment... ."