MORGAN STANLEY: Apple’s era as an iPhone company is over — but there’s another business that’ll take its place (AAPL)
Apple CEO Tim Cook said on the company’s first-quarter earnings call this month that the IPhone X did not sell well. The stock, in turn, suffered slight losses.
Morgan Stanley forecasts services revenue growth will contribute more than 50% of Apple’s total revenue growth over the next five years. The iPhone, which has contributed 86% of Apple’s revenue growth over the past five years, will make up 22% of revenue growth in the next five.
Huberty estimated that roughly 60% of revenue growth is now attributable to services. That, coupled with wearables, like the Apple Smart Watch, “will drive almost all of Apple’s growth over the next five years,” she added.
Here are some of the services that Morgan Stanley believes are still not fully monetized.
Apple Music has grown considerably, and yet only 2.9% of Apple users have it, currently.
iCloud subscribers are growing, and Apple is launching two new data centers in China.
Apple Pay is in 50% of US retail locations, and usage is still low.