A new analyst note from Morgan Stanley’s Katy Huberty estimates that Apple’s long-awaited TV content and video service will create a big boost for the company’s services over the next few years and offer real competition for Netflix. In fact, she believes it will be generating over $4 billion by 2025.
As reported by CNBC, Huberty believes that the market is underestimating Apple’s ability to continue growing its services revenue at the fast pace we’ve seen over the last few years.
The note mentions that even though Apple will have disadvantages like a much smaller video catalog than Netflix and being late to market, there are some upsides.
Apple finally made an official statement last month as it said it would launch its video service next year. Huberty estimates that Apple will generate $500 million next year from the video service alone. As for a longer-term outlook, the note projects $4.4 billion in revenue by 2025.
As detailed in a profile of Eddy Cue today by The Information, we could also see the possibility of the Apple TV app moving beyond the company’s own hardware to Android devices and Smart TVs.
Huberty has raised her AAPL target price roughly 7% from $232 up to $245. AAPL shares are trading at $228 at the time of writing.
