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Analyst: Apple may enter subscription biz

updated 02:50 pm EDT, Thu April 26, 2007

Apple in subscription biz?

Apple may enter the subscription services business in the future with one stop shop for music, TV, movie, and video game content, according to American Technology Research senior analyst Shaw Wu. "Apple again showed its unparalleled ability to think and execute the unconventional," the analyst wrote in a research note obtained by MacNN. "In our analysis, we envision Apple entering the subscription services business in a bigger way with music, TV, movie, and video game content truly becoming the only vertically integrated play and one stop shop for hardware, software, and services for the digital lifestyle." American Technology Research maintained its 'buy' rating on Apple shares with a $145 price target.

Wu also pointed to three surprises revealed in the Cupertino-based company's March quarter report, namely its ability to capitalize in a favorable component pricing environment, strong Mac shipments despite evidence of pent-up demand ahead of Leopard's launch, and larger plans with the iPhone and Apple TV.

"While there could be near-term confusion and concern with its new accounting treatment where fiscal year 2008 estimates will likely be reduced modestly, at the end of the day, there is no impact to cash flow (as Apple collects full cash at the point of sale) and we believe longer-term, Apple's financial predictability improves with more recurring revenue," said Wu. "In addition, we believe Apple's surprising use of subscription accounting for iPhone and Apple TV is a sign of things to come."




by MacNN Staff

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Comments

  1. nativeNYer

    Joined: Dec 1969

    0

    Uhm, wha?

    I guess Shaw and ATR haven't seen the quote from Jobs just the other day where he says subscription weren't likely to happen. Steve doesn't like them, and he will avoid them as long as humanly possible. It was in fact noted in an earlier article today here on MacNN. Yet these analysts seem convinced it's gonna happen anyway. Whatever.

  1. horvatic

    Joined: Dec 1969

    0

    Steve already said No

    I'm afraid Steve Jobs said no he won't enter subscription Business. Nobody wants it including me so I agree with Steve Jobs. I want to own my music and do as I please with it when I want to. Not on some online time line or payment plan schedule.

  1. davelentz

    Joined: Dec 1969

    0

    confusion

    The confusion occurs because in the earnings conference call, they repeatedly stated that they would be using the "subscription model" to account for the AppleTV and iPhone revenue stream.

    THIS IS ONLY A BOOKKEEPING THING. IT HAS NOTHING TO DO WITH HOW THEY ARE SOLD TO THE CONSUMER.

  1. eldarkus

    Joined: Dec 1969

    0

    yea ok

    Just because Jobs publicly says no, doesnt mean squat. OS X on Intel?? Will never happen.. but was built from day one with OS X. I would not be surprised is they arlreay have a working subscription model.

  1. testudo

    Joined: Dec 1969

    0

    yea ok

    And I seem to remember that they said they weren't getting into the phone business. I guess the two years of iphone development were just looking to make a better ipod, and the phone was a last second add-on.

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