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Apple Expands Apple Pay Service to Norway, Poland & Ukraine

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Apple (AAPL - Free Report) recently expanded Apple Pay to Norway. The service now covers more or less 22 countries, including recent launches in Poland and Ukraine.

Per Bloomberg, the mobile payment service currently serves Nordea Bank AB and Santander Bank’s customers in Norway. Moreover, according to Visa, the service will eventually be extended to clients of Sbanken ASA.

Apple’s Norway expansion is a threat to Vipps, which has gained widespread adoption rapidly. Per Bloomberg, three million Norwegians are already using this mobile payment service. Hence, it will not be easier for Apple to get a foothold in the country, instantly.

Nevertheless, international expansions have been a key catalyst for Apple Pay’s expanding user base. Active users more than doubled, while transactions tripled year over year in the last-reported quarter.

Apple Pay Availability Boosts Services Business

Apple's Services segment, which includes revenues from Internet Services, App store, Apple Music, AppleCare, Apple Pay, and licensing and other services, has become the new cash cow for the company.
 

 

Apple targets to double Services revenues of $24 billion, earned in fiscal 2016, by 2020. The segment is expected to grow strongly, driven by increasing adoption of Apple Music and Apple Pay.

Apart from the international markets, Apple Pay is gaining traction in the United States, as the platform is currently accepted by half of the country’s retailers. In March, this year, Apple launched Express Transit with Apple Pay, in Beijing and Shanghai.

Moreover, in December 2017, the company launched Apple Pay Cash in the United States, which is off to a “terrific start” with “millions of people” already using the service. The service is reportedly now expanding into international markets like Brazil, Ireland and Spain.

However, the expanding international presence is expected to increase competition for Apple Pay from mobile payment services like PayPal (PYPL - Free Report) , Samsung Pay and Venmo (in the U.S.).

Apple Music: Another Major Driver

Apple’s Music service already boasts almost 50 million subscribers. The availability of original content — now expected as early as March 2019 — will further boost subscription revenues. The expanding original content portfolio is expected to improve user engagement that will ultimately benefit the Services business.

The company’s aggressive approach is understandable as the iPhone maker is quite late in joining the bandwagon. The streaming market is currently dominated by Netflix (NFLX - Free Report) , Hulu, HBO, YouTube, Amazon Prime and Comcast. Moreover, this space is anticipated to get more crowded with the launch of a streaming service by Disney (DIS - Free Report) .

Apple recently inked a multi-year partnership with Oprah Winfrey, who will create original programs while also making a few on-camera appearances.

Currently, Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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