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"While Apple's new offerings were not necessarily breakthrough or novel, we are encouraged by the breadth of new services and Apple's increasing awareness of its installed base as a core, leverageable asset," said Bernstein's Toni Sacconaghi. "The offerings appear focused on maximizing revenue generation, more so than on ecosystem enhancement."
The services could "generate several billion in annual revenues within the next few years," he claimed, pointing to Apple TV+ and Apple TV Channels as the ones with the biggest potential. He cautioned however that the video streaming market is "extremely crowded," and Apple has only promised a "dramtically narrower" original content library. It's not clear if Apple will be offering any third-party on-demand video outside of Channels, which are just centralized subscriptions.
"We see the second greatest potential from the Apple Card, which we estimate could ultimately generate ~$1B in revenues," Sacconaghi continued. Created in conjunction with Goldman Sachs, the Card can be applied for entirely through an iPhone and used the same day across all Apple devices. It will also have a cash rewards scheme and a physical card made of titanium, the latter without any visible identifiers apart from a person's name.
"[Apple] News[+] strikes us as a compelling offering for consumers, but we struggle to construct a case where revenues to Apple would meaningfully exceed $1B," the analyst concluded. "Finally, Arcade is a relative wildcard, given its novelty, and that success could potentially cannibalize App Store downloads, as happened with streaming music."
Bernstein is giving Apple stock a "market perform" rating with a $160 price target.
Morgan Stanley's Katy Huberty likewise sees Apple's install base as a weapon, saying the services will help it "further monetize its 1.4B, and growing, device installed base."
Services "hold the key to Apple revenue and profitability growth over the next 5 years," she added, raising a stock target from $197 to $220 with an "overweight" rating. She declined to raise other estimates however, given a lack of specifics around the pricing for its new video and Apple Arcade services.
Huberty also suggested that Apple will probably bundle hardware and services at some point in the future, and/or multiple services, the latter something repeatedly rumored. She called the lack of a services bundle at Monday's event — and indeed, specific prices and dates for most services — "a disappointment."