The prospect of the iPhone 8/X/Pro has Apple Inc. (NASDAQ:AAPL) fanatics frothing at the mouth. However, investors probably have a bigger interest in the company’s booming services business. A few major events await Tim Cook and his company in that department. Analysts highlight a surging in-house TV service, a new and potentially dominant search engine, and a cluster of other services that will break Apple from its hardware dependence.
There are few other analysts more glued to the Apple’s developments than Bernstein Research’s Toni Sacconaghi. He pointed out several developments set to bolster the services side of the of premium gadget business. Don’t underestimate the growth that aways Apple, the analyst would say. His estimates suggests that services will account for 13 percent of the tech firm’s total revenue this year.
Back when Apple Inc. began heralding the success of its services, investors did not dig too deeply into it. At best, it was a ploy to distract from the company’s dwindling hardware sales. Millions of isolated iTunes sales and cloud subscription payments weighed nothing in contrast to the products that everyone loves: the iPhones, iPads and Macs.
A huge bump in Apple Inc. services
Yet Sacconaghi points out that Apple’s services renvenue is rising at a yearly rate of 19 percent. That’s a steamroller rate too, one which could see services outshining hardware in years to come. The truth is that all those isolated digital purchases, the apps and in-app payments, the iTunes song purchases, the iCloud subscriptions and have collectively become a formidable business. As CNBC’s Adam Lashinsky puts it, services “is becoming a growth engine for the company”.
There is also the rumor (they always prove to be more than rumors though) that Apple Inc. wants to make its search engine default on all its products. That’s an uh-oh for Google as millions of iPhone, iPad and Mac users worldwide could soon put the web giant aside.
Beyond that, the Bernstein researcher predicts that Google would have to fork out a lot of cash if the rumors become reality. The web major could find itself forking out $3 billion in yearly fees to Apple.
Sacconaghi highlights how most of the Google fees would be pure profit too, a massive win for Apple Inc. (NASDAQ:AAPL) services.
There is gold in this venture. That is especially true when investors consider the likely revenue bump which would come for increased ad placements. That, and the the increased favor from other online giants that would eventually pay for preference placements. No doubt the might of its boosted influence would also mine up several new online revenue streams as well.
Vudu comes to Apple TV
The Apple TV just got bolstered too. News this week reveals that Vudu, the streaming service under Wal-Mart Stores, will run on the product from Tuesday next week.
There has been widespread talk about the development of a Vudu App. It looks like the Apple TV will be the among the first to use it. The public officially learned about the app being a work in progress back in March. Right now, any Apple gadget user who wishes to use the Vudu stream services has to utilize the AirPlay app.
Vudu is one of those niche TV streamers with a growing subscriber base. It is certainly no Netflix, but there are more than 100,000 titles on the platform. All of those can either be rented or bought. Vudu supports UltraViolet too, a video cloud storage platform which has quickly become the industry norm.
Via the Mal-Mart-owned app, users can share many purchased movie titles without any additional charge. Vudu also provides 4K viewing support and can convert around 8,000 movies from disc to digital.
Apple Inc is notoriously against the sale of movies and shows on its products. Somehow, Vudu seems to have won the company over. Again, the 22nd of August will see the app widely avaible for use on the Apple’s set-top product.
Apple Inc. (NASDAQ:AAPL) services are on a growth spurt. Earlier this year, CEO Tim Cook claimed the business segment will soon be worth a Fortune 100 company on its own. That is a massive assurance to make to investor. Weighing the prospects at the moment, Cook’s assertion no longer seems so far-fetched.