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Morgan Stanley Predicts Apple TV+ Could Be a $9 Billion Business by 2025

Apple's services business is set to grow by 20 percent next year, boosted by its forthcoming Apple TV (https://www.macrumors.com/roundup/apple-tv/)+ streaming service, according to the latest predictions by Morgan Stanley analyst Katy Huberty (via CNBC (https://www.cnbc.com/2019/10/23/apple-tv-will-become-a-9-billion-business-by-2025.html)).





<img src="(http://cdn.macrumors.com/article-new/2019/09/apple-tv-plus-promo-image.jpg)" alt="" width="1200" height="791" class="aligncenter size-full wp-image-708833" />


In a new investor note, Huberty predicts that &zwnj;Apple TV&zwnj;+ will grow into a $9 billion business by 2025, despite increasing competition in the streaming market and even if only 1 in every 10 Apple user subscribes to the service:

"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 &zwnj;Apple TV&zwnj;+ 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."

Huberty also notes that for &zwnj;Apple TV&zwnj;+ to have a more material impact on its near term estimates, Morgan Stanley would have to assume: "1) &zwnj;Apple TV&zwnj;+ production costs are significantly higher at the launch of the Service, and/or 2) more users redeem the Apple 12 month free offer with the purchase of a device."





Launching on November 1, &zwnj;Apple TV&zwnj;+ costs $4.99 per month and will be available on the &zwnj;Apple TV&zwnj; app on iPhone, iPad (https://www.macrumors.com/roundup/ipad/), &zwnj;Apple TV&zwnj;, iPod touch (https://www.macrumors.com/roundup/ipod-touch/), Mac and other platforms, including online via www.tv.apple.com. Customers who purchase any new iPhone, &zwnj;iPad&zwnj;, &zwnj;Apple TV&zwnj;, Mac or &zwnj;iPod touch&zwnj; starting September 10, 2019, are eligible for one year of &zwnj;Apple TV&zwnj;+ for free.





Morgan Stanley also raised its target price for Apple stock from $247 to $289. That works out as a 17 percent increase based on its outlook for &zwnj;Apple TV&zwnj;+, as well as its prediction that sales will return "to growth as replacement cycles peak" in 2020 as users upgrade to Apple's 5G-enabled iPhones.




<div class="linkback">Tags: Morgan Stanley (https://www.macrumors.com/roundup/morgan-stanley/), Apple TV Plus (https://www.macrumors.com/roundup/apple-tv-plus/)</div>
This article, &quot;Morgan Stanley Predicts Apple TV+ Could Be a $9 Billion Business by 2025 (https://www.macrumors.com/2019/10/24/morgan-stanley-apple-tv-plus-9-billion-business/)&quot; first appeared on MacRumors.com (https://www.macrumors.com)

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Source: Morgan Stanley Predicts Apple TV+ Could Be a $9 Billion Business by 2025 (https://www.macrumors.com/2019/10/24/morgan-stanley-apple-tv-plus-9-billion-business/)