Apple’s next press event is on 25 March, and it’s expected to focus on services – including the long-rumoured launch of a Netflix-style video-streaming service.
Analyst Wedbush has published its thoughts on what this could mean. “If Apple executes with minimal speed bumps and aggressively acquires content given the company’s massive installed base and unmatched brand loyalty we believe reaching 100 million subs in the medium term (3 to 5 years) is a realistic goal that could translate into a $7 billion to $10 billion annual revenue stream over time for Apple and further cement its installed base and halo effect,” claimed its note (commas are in short supply in analyst-land, clearly).
However, Wedbush had a warning for Apple too. “The company is definitely playing from behind the eight ball in this content arms race with Netflix, Amazon, Disney, Hulu, and AT&T/Time Warner all going after this next consumer frontier investing significantly more dollars ($20 billion combined and counting per annum) on content,” it claimed. “While acquisitions have not been in Apple’s core DNA, the clock has struck midnight for Cupertino in our opinion and building content organically is a slow and arduous path, which highlights the clear need for Apple to do larger, strategic M&A (a24, Lionsgate, Sony Pictures, CBS/Viacom, Netflix, MGM) around content over the coming year to “double down” and drive the services flywheel especially with its new video subscription service set to be rolled out.”