Apple’s services business is set to grow by 20% next year according to Morgan Stanley analyst Katy Huberty. Reported by CNBC, she released a note on Wednesday that detailed the firm’s position on Apple’s stock price and its prediction for the success of Apple TV+.
Huberty believes that even with growing competition in the streaming market, that Apple TV+ will grow into a $9 billion business by 2025:
“With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25.”
Morgan Stanley has also raised its target price for Apple stock from $247 to $289, a 17% increase supported by its outlook for Apple TV+ as well as its prediction that many people will upgrade to the 2020 iPhones.
“With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020.”