Analyst: Apple needs new services to succeed because existing ones will slow significantly

“Bernstein analyst Toni Sacconaghi wrote Thursday that Apple Inc. needs to succeed with its new services offerings given that he predicts the company’s existing services business could start showing growth of less than 10% in the next three or four years,” Emily Bary writes for MarketWatch.

Services growth is critical in driving Apple’s overall top line, as well as potentially stabilizing overall company gross margins, which have fallen in each of the last five years. Given that Apple’s installed base should be relatively flat going forward, services growth will likely depend entirely on additional [average revenue per user] expansion, whether through new offerings or increased monetization of existing businesses. — Bernstein analyst Toni Sacconaghi

Bary writes, “Sacconaghi sees some potential in newer services.”

Read more in the full article here.

MacDailyNews Take: No surprises here. As always, Sacconaghi basically states the obvious: Apple will need to execute in order to succeed.

Also, you can’t predict that “Apple’s installed base should be relatively flat going forward” as there is tremendous headroom for Apple’s TV app, driven by Apple TV+ hit(s), spreading rapidly to non-Apple TV users via new Apple TV units and, especially, new smart TVs.

Apple News+, Apple TV+, Apple Card, and Apple Arcade each hold tremendous promise, that much is sure!

Related articles:
Samsung becomes first TV manufacturer to launch Apple’s AirPlay 2 and Apple TV app – May 13, 2019
Apple’s all-new Apple TV app available in over 100 countries starting today – May 13, 2019
Innovation isn’t required for Apple TV+ to become a big hit – April 9, 2019
Samsung 4K and 8K TVs that support Apple’s AirPlay 2, iTunes Store go on sale – February 11, 2019

This article was originally posted here