Apples $4.99-a-month entry into the streaming derby “wont drive profits” but “will eventually lead to an Amazon Prime-like bundle” and also help its product ecosystem, in the view of Wall Street firm Macquarie Research.
UBS said the price is “lower than most expectations, undercuts all other rivals, and should spur adoption.”
Investors have seemed to mirror analysts largely upbeat reaction to Apples major product event Tuesday, sending the tech giants shares up 3% in mid-day trading Wednesday. The stock was at $222.93 per share on above-average trading volume.
CEO Tim Cook presided over the nearly two-hour unveiling of a range of hardware and other offerings, including a new line of iPhones. While the devices have drawn mixed reviews among the Apple-rati and in the all-important market of China, Wall Street has concluded that the pricing strategy reflects a shrewd strategy to drive hardware sales a la Amazon.
“We think this is most interesting when looked at as an indicator that Apple has shifted its view to customer long-term value in its overall ecosystem,” Macquarie said in a note to clients, noting the one year of free service being offered to anyone who buys a new Apple device.
“In our view, even if video is a wild success for Apple (attracting 50%-100% of Netflix subs), it wouldnt move [long-term earnings per share] more than 0.5%. However, it should be good for the overall ecosystem.”
Macquaries Tim Nollen said Roku, Netflix and Disney are among the most affected by Apple TV+, but said “commercial impact is probRead More – Source