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The fans of Apple's Steve Jobs Theater may have admired the talent gathered yesterday by the company for its elaborate video tease, but the Wall Street reaction could be described as a collective "meh".
Shares of Apple, which plunged 2% yesterday, fell 1% today, closing at $ 186.79 after most observers criticized the two-hour event for being too much. clear on the details. Although background information was published on the company's incentive to focus on news, games and credit cards, Apple TV + was presented with almost no details. Its launch date and price were not confirmed in a long and rich presentation, which also did not include clips or trailers for the original programming paid for the service. There was a grammar part of an initial pitch or a TCA panel, but without footage or questions / answers.
It is undeniable that the "installed base" of the company offers Hollywood an attractive target. With over a billion devices used, Apple can serve as a difficult gateway to match. This is what she intends to do in the video, as in streaming music and other areas. The management team focuses primarily on increasing revenue from services to reduce reliance on device sales or equipment manufacturing.
While subscription-based streaming has taken off in recent years, the company sees a similar opportunity to attract millions of people to subscriptions on television. By hosting applications in its ecosystem and charging 30% of fees, the company can participate in the re-aggregation of television without spending as much as Netflix or other competitors.
Despite this, many analysts have downplayed the threat to the established streaming giants.
"Apple's new video service will not be a killer of Netflix and will not have a significant impact on the company's investment prospects," Colin Gillis, research director at Chatham Road Partners, told Reuters. customers. "We estimate that Apple Music, with its 56 million subscribers, still accounts for only 10 to 15 percent of service business revenue, or about 1 to 2 percent of revenue. total business. Video streaming will not save Apple's stock if the iPhone market goes down. Apple remains the iPhone company. "
Raymond James analyst Justin Patterson reaffirmed his "buy" rating on Netflix and called Apple's newcomer "more progressive than revolutionary."
Morgan Stanley's Ben Swinburne was equally cautious, wondering if Apple had "an appetite for success," as he said in a research note. At the same time, "the market may still be underestimated by Netflix's appetite for risk, its focus and its ability to bring the best of Silicon Valley to the best of Hollywood."
Paolo Pescatore, an analyst at PP Foresight, said Apple's presentation should be placed in a broader context. "It should not be seen as a game changer or a turning point for Apple's future," he wrote in an email to Deadline. "Unfortunately, there was a lot of hype before the event and as a result, there was some negativity compared to what was announced. Apple basically puts all the elements in place. It will take time to fully realize the overall vision. The road ahead is long.
Apple will release its second quarter financial results in the coming weeks, which will provide a better understanding of the service sector's dynamism and persistent hardware challenges. During the first fiscal quarter, which coincided with the holiday season, the company announced a drop in revenue from the iPhone, a once unimaginable statistic.
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