Market Overview

Apple Music Could Account For 5% Of 2016 Revenue, Morgan Stanley Says

Apple Music Could Account For 5% Of 2016 Revenue, Morgan Stanley Says

In a report published Tuesday, Morgan Stanley analyst Katy L. Huberty maintained a Buy rating and $166 price target on Apple Inc. (NASDAQ: AAPL), while mentioning that with improvements in personalization and the introduction of new apps and services, 20 percent of the company's profits could be contributed by Services by 2017.

The company is expanding its Services platform with the launch of Apple Music, "a platform for streaming personally curated music, 24/7 global radio, and connecting artists to fans. The service will launch in 100 countries for $9.99 per month or $14.99 for a family of up to 6, with the first 3 months free. A billion people will have access to Apple Music via the iPhone, iPad, iPod touch, Mac and PC starting June 30," Huberty said.

The analyst believes that Apple Music would contribute as much as 5 percent of the revenue and 2 percent of the EPS in FY16, with every 1 percent penetration of the company's customer base leading to revenue growth of 0.5 percent and EPS of $0.02 in FY16.

Related Link: Why Apple's 'Me-Too' Music Service Was The Worst Part Of WWDC

According to the Morgan Stanley report, "Apple announced new partnerships including an incremental 300K US locations accepting Pay, store credit cards, and reward programs. Additionally, Apple Pay becomes available in the UK next month with participation from 2,500 banks and 250K locations including the London transport network."

In fact, the analyst believes that the company aims to replace every credit/debit card, rewards program and ticket with its Apple Wallet in the future. Also, iOS 9 offers a higher degree of personalization for everyday mobile usage, along with proactivity and intelligence. It incorporates intuitive functioning with improvements in various features, such as improved map functionality. It also includes features that improve the iPad experience.

"Apple recently hit 100B app downloads with $30B in payments, implying a consistent app download run-rate but with accelerating monetization," Huberty added.

Latest Ratings for AAPL

Feb 2021RBC CapitalAssumesOutperform
Jan 2021DA DavidsonMaintainsBuy
Jan 2021Deutsche BankMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings


Related Articles (AAPL)

View Comments and Join the Discussion!

Posted-In: Apple Music Katy L. Huberty Morgan StanleyAnalyst Color Reiteration Analyst Ratings Tech Best of Benzinga

Latest Ratings

WKHSRoth CapitalMaintains15.0
HCKTRoth CapitalMaintains22.0
ARECRoth CapitalInitiates Coverage On7.5
SLABWells FargoMaintains180.0
PENWells FargoMaintains310.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at