Moscow, March 22 — “Lead. Economy” Analysts raise ratings for Apple amid expectations of strengthening the service business of Cupertino giant. High hopes and on the streaming video service, announcement of which is expected March 25th.
Analysts at Needham upgraded shares of Apple from Buy to Strong, explaining the growing cost of ecosystem of the American Corporation. Previously in Bank of America also raised its rating on Apple stock from Neutral to Buy, and thus began to encourage investors to acquire securities of the company.
“Now we expect better results compared to the previously projected in the directions of the service business segment, Wearables, and Home Accessories, as well as improved performance due to the reduction of churn and high barriers to market entry of competitors”, — wrote in a note to clients, Needham analyst Laura Martin.
The experts also raised its forecast for target value of Apple shares from $180 to $225. Analysts at Needham believe that the new services will contribute to further stock recovery Apple. Bank of America also previously raised the forecast for the target value of Apple shares in the 12-month horizon, from $180 to $210.
In Bank of America believe that a positive impact on the direction Apple should have expected simplification of subscriptions to company’s services, a large share buyback in April and expected commercial contracts in China. However, experts note that the process of diversification of the profit will be protracted. “Most investors agree that Apple remains a hardware manufacturer. Although the income from services continue to grow at double-digit rates from year to year, the lion’s share of dollar gross profit will continue to have on the device over the next few years,” the report says Bank of America for customers.
According to experts, despite the increased forecast, Apple is still a few factors that can affect both the growth and the drop in prices. Among the negative points the experts related pricing pressure from competitors offering cheaper products with comparable characteristics, as well as the lack of impressive features, the iPhone and the threat of changes in the structure of income distribution in the App Store.
Monday, March 25, the company will hold a presentation for which has chosen the slogan It’s show time (“It’s Showtime”). It is expected that at this event Apple will show a new services — streaming TV and subscribe to online versions of Newspapers and magazines built into the existing Apple News.
About Apple’s plans to launch its own streaming service, it became known about three years ago. The video service will be an analogue of Netflix or Amazon Video with a selection of movies, TV series and programs made by the order of the Apple, and additionally acquired others ‘ content. As previously reported by CNBC, deliver your content to the new Apple refused Netflix (talking about the series “house of cards”, “Strange phenomena,” “Orange — hit of the season”, etc.). Most likely, refuse and HBO: “Apple” while offering a library of hits like “Game of thrones” less than Amazon Prime Video.
According to sources, the development of the company has more than 20 TV series and TV shows, and possibly in the future, to join them, and feature films. Run this division of the two former head of Sony Pictures Television.
To attract the widest possible audience-to-brand video service, Apple is focused on the creation of television shows rated PG. The abbreviation for the films intended for viewing by children under the age of 13. This age, say in Cupertino, it is optimal to engage in proprietary Apple ecosystem, assuming a sufficient number of rights to unrestricted use of the majority of the company’s products.
It is expected that Apple will launch a streaming video service on your Apple TV for iPhone, iPad and consoles Apple TV. Now app for Apple Apple TV allows you to search for shows, such as ABC or HBO, inside the service, but to pay subscriptions and view them redirects users to third-party applications. According to sources, to compete with Amazon Prime Video and other, the company took the decision to launch its own video service.
Morgan Stanley analysts expect Apple to sell some services within the package rate, including a fee for access to future video portal, Apple Music and news app Texture. This product will be every year to add 2 percentage points to growth in service revenues of the Corporation until 2025, experts say. In addition, the company can expand business in the field of advertising and payments.
In addition to the monetary side of the issue, the presence of Apple in the market of video streaming can be a key factor to preserve Apple’s reputation as a pioneering company. The smartphone market is already saturated, and next-generation technology, which, supposedly, works Apple (augmented reality glasses, a new automotive platform) will probably not be ready in the near future.
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