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Apple (AAPL) Witnesses Strong Momentum in App Store, Services
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Apple (AAPL - Free Report) recently released the 2020 retrospective of its Services business, which includes the App Store, Apple Music, iCloud, Apple Arcade, Apple Books, Apple TV+, Apple News+, Apple Card and the newly added Fitness+ service.
Markedly, Apple witnessed strong consumer spending on its App Store during the holiday season. The iPhone-maker announced that its App Store customer spending on digital goods and services totaled $1.8 billion between Christmas Eve and New Year’s Eve.
We believe that rising spending on apps and the success of wearables such as AirPods and Apple Watch will aid Apple to generate more revenues besides expected uptick in sales of first 5G-enabled iPhone 12 series. This is expected to drive share price momentum in 2021.
The company’s shares have returned 69.1% in the past year, outperforming the Computer - Mini computers industry’s rally of 62.8%.
One Year Performance
Apple’s Services Growth Momentum to Aid Top Line
App Store: Coronavirus-led social distancing norms in 2020 boosted strong momentum in App Store sales. Markedly, Zoom (ZM - Free Report) and Disney’s (DIS - Free Report) streaming service Disney+ were the most downloaded apps in 2020.
Notably, App Store accounted for 68.4% of total sales, which came in at $276.6 million, up 35.2% year over year on Christmas Day 2020, compared with Alphabet (GOOGL - Free Report) owned Google’s Play Store sales of $129 million, up 33% year over year and comprising 32% of the total, per Sensor Tower report.
Additionally, App Store customer spending on the first day of 2021 reached $540 million, hitting a new single-day record.
The robust sales figures show that customers are increasingly willing to spend on apps and that developers are finding new ways to monetize them. Notably, since App Store’s launch in 2008, app developers have earned more than $200 billion.
Moreover, Apple’s new App Store Small Business Program offers the vast majority of developers a reduced commission of 15% than the regular 30% to empower reinvestment in their growth and expansion in 2021.
iCloud Services: Apple noted that in terms of security, more than 85% of iCloud users have enabled two-factor authentication.
Apple has rolled out family sharing feature wherein up to six family members can share access to a single iCloud storage plan, including Apple TV+, Apple Arcade, Apple Music, Apple News+, and Apple Fitness+, or bundle it all together with a subscription to Apple One.
Apple Tv App: The app is available on over 1 billion screens in more than 100 countries across select platforms including LG, Sony, and VIZIO smart TVs, and PlayStation and Xbox consoles.
The new Apple TV+ tab in the Apple TV app on iOS and tvOS enables access to premium channels like AMC+, CBS All Access, SHOWTIME, and Starz and content from streaming services like Disney+, Peacock, HBO Max, and Discovery+.
Apple’s original shows and films on Apple Tv+, which have been featured across numerous Best of 2020 lists include Ted Lasso, The Morning Show, Tehran, Mariah Carey’s Magical Christmas Special, Mythic Quest: Raven’s Banquet, On the Rocks, Beastie Boys Story, Boys State and Little America among others.
In early 2021, customers can enjoy second seasons of Apple’s original series including Dickinson, Servant, and For All Mankind, as well as new series Losing Alice. Movies slated for 2021 include Palmer, Cherry, and the documentary, Billie Eilish: The World’s A Little Blurry.
Moreover, the Apple TV app has introduced Essential Stories, celebrating Black artistry in film and TV, featuring original artwork by Darien Birks, Loveis Wise, and Richard Chance in 2020.
Apple Music: Per the announcement, Apple Music is offering over 70 million songs with world class music experts and taste makers curating thousands of playlists and more than 25,000 exclusive radio episodes besides other original content.
In August 2020, Apple launched new Apple Music radio stations, including Apple Music Hits and Apple Music Country, coupled with Apple Music 1 and expanded to 52 new territories globally.
Moreover, nearly 90% of iOS 14 listeners have used the new features rolled out in 2020 such as Listen Now, an all-new Search, personal radio stations, and Autoplay. Engagement with Apple Music’s industry-leading lyrics feature has doubled since 2020.
Fitness+: Apple rolled out Fitness+ subscription services built for Apple Watch on Dec 14. Fitness+ tracks health and workout-related data from Apple Watch that users can view on their iPhones, iPads, or Apple TVs.
Markedly, Apple Fitness+ workouts will include cycling, treadmill, rowing, HIIT, strength, yoga, dance, core and mindful cooldown. Each will be accompanied by music curated by trainers.
Apple News: Apple News launched personalized and curated local news in select cities in the United States. Additionally, the company rolled out Apple News+ audio, with professionally narrated versions of feature stories available to Apple News+ subscribers.
Apple Pay: Apple claims that more than 90% of stores in the United States, 85% of stores in the United Kingdom, and 99% of stores in Australia accept Apple Pay. With surge in e-commerce sales due to the coronavirus pandemic, Apple’s pay services through iPhone and Apple Watch are expected to thrive in 2021.
Apple Arcade: Apple’s gaming service offers more than 140 new and exclusive mobile games including award-winning titles such as LEGO Brawls, Sonic Racing, Crossy Road Castle and SpongeBob: Patty Pursuit, as well as Arcade originals like Grindstone, What the Golf? and Little Orpheus.
Notably, gaming titles such as Among Us, Roblox and Shanghai-based miHoYo’s Genshin Impact gained immense popularity in 2020.
Apple Books: Apple Books draws over 90 million monthly active users. In 2020, the company witnessed double-digit growth in categories such as Mysteries & Thrillers and Romance, as well as even bigger surges in downloads for Kids, Comics & Graphic Novels, and Cookbooks, Food & Wine.
Apple Podcasts: Apple’s podcast service is available in over 175 countries with programming in more than 100 languages. However, none of these are exclusive to Apple.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Image: Bigstock
Apple (AAPL) Witnesses Strong Momentum in App Store, Services
Apple (AAPL - Free Report) recently released the 2020 retrospective of its Services business, which includes the App Store, Apple Music, iCloud, Apple Arcade, Apple Books, Apple TV+, Apple News+, Apple Card and the newly added Fitness+ service.
Markedly, Apple witnessed strong consumer spending on its App Store during the holiday season. The iPhone-maker announced that its App Store customer spending on digital goods and services totaled $1.8 billion between Christmas Eve and New Year’s Eve.
We believe that rising spending on apps and the success of wearables such as AirPods and Apple Watch will aid Apple to generate more revenues besides expected uptick in sales of first 5G-enabled iPhone 12 series. This is expected to drive share price momentum in 2021.
The company’s shares have returned 69.1% in the past year, outperforming the Computer - Mini computers industry’s rally of 62.8%.
One Year Performance
Apple’s Services Growth Momentum to Aid Top Line
App Store: Coronavirus-led social distancing norms in 2020 boosted strong momentum in App Store sales. Markedly, Zoom (ZM - Free Report) and Disney’s (DIS - Free Report) streaming service Disney+ were the most downloaded apps in 2020.
Notably, App Store accounted for 68.4% of total sales, which came in at $276.6 million, up 35.2% year over year on Christmas Day 2020, compared with Alphabet (GOOGL - Free Report) owned Google’s Play Store sales of $129 million, up 33% year over year and comprising 32% of the total, per Sensor Tower report.
Additionally, App Store customer spending on the first day of 2021 reached $540 million, hitting a new single-day record.
The robust sales figures show that customers are increasingly willing to spend on apps and that developers are finding new ways to monetize them. Notably, since App Store’s launch in 2008, app developers have earned more than $200 billion.
Moreover, Apple’s new App Store Small Business Program offers the vast majority of developers a reduced commission of 15% than the regular 30% to empower reinvestment in their growth and expansion in 2021.
iCloud Services: Apple noted that in terms of security, more than 85% of iCloud users have enabled two-factor authentication.
Apple has rolled out family sharing feature wherein up to six family members can share access to a single iCloud storage plan, including Apple TV+, Apple Arcade, Apple Music, Apple News+, and Apple Fitness+, or bundle it all together with a subscription to Apple One.
Apple Tv App: The app is available on over 1 billion screens in more than 100 countries across select platforms including LG, Sony, and VIZIO smart TVs, and PlayStation and Xbox consoles.
The new Apple TV+ tab in the Apple TV app on iOS and tvOS enables access to premium channels like AMC+, CBS All Access, SHOWTIME, and Starz and content from streaming services like Disney+, Peacock, HBO Max, and Discovery+.
Apple’s original shows and films on Apple Tv+, which have been featured across numerous Best of 2020 lists include Ted Lasso, The Morning Show, Tehran, Mariah Carey’s Magical Christmas Special, Mythic Quest: Raven’s Banquet, On the Rocks, Beastie Boys Story, Boys State and Little America among others.
In early 2021, customers can enjoy second seasons of Apple’s original series including Dickinson, Servant, and For All Mankind, as well as new series Losing Alice. Movies slated for 2021 include Palmer, Cherry, and the documentary, Billie Eilish: The World’s A Little Blurry.
Moreover, the Apple TV app has introduced Essential Stories, celebrating Black artistry in film and TV, featuring original artwork by Darien Birks, Loveis Wise, and Richard Chance in 2020.
Apple Music: Per the announcement, Apple Music is offering over 70 million songs with world class music experts and taste makers curating thousands of playlists and more than 25,000 exclusive radio episodes besides other original content.
In August 2020, Apple launched new Apple Music radio stations, including Apple Music Hits and Apple Music Country, coupled with Apple Music 1 and expanded to 52 new territories globally.
Moreover, nearly 90% of iOS 14 listeners have used the new features rolled out in 2020 such as Listen Now, an all-new Search, personal radio stations, and Autoplay. Engagement with Apple Music’s industry-leading lyrics feature has doubled since 2020.
Fitness+: Apple rolled out Fitness+ subscription services built for Apple Watch on Dec 14. Fitness+ tracks health and workout-related data from Apple Watch that users can view on their iPhones, iPads, or Apple TVs.
Markedly, Apple Fitness+ workouts will include cycling, treadmill, rowing, HIIT, strength, yoga, dance, core and mindful cooldown. Each will be accompanied by music curated by trainers.
Apple News: Apple News launched personalized and curated local news in select cities in the United States. Additionally, the company rolled out Apple News+ audio, with professionally narrated versions of feature stories available to Apple News+ subscribers.
Apple Pay: Apple claims that more than 90% of stores in the United States, 85% of stores in the United Kingdom, and 99% of stores in Australia accept Apple Pay. With surge in e-commerce sales due to the coronavirus pandemic, Apple’s pay services through iPhone and Apple Watch are expected to thrive in 2021.
Apple Arcade: Apple’s gaming service offers more than 140 new and exclusive mobile games including award-winning titles such as LEGO Brawls, Sonic Racing, Crossy Road Castle and SpongeBob: Patty Pursuit, as well as Arcade originals like Grindstone, What the Golf? and Little Orpheus.
Notably, gaming titles such as Among Us, Roblox and Shanghai-based miHoYo’s Genshin Impact gained immense popularity in 2020.
Apple Books: Apple Books draws over 90 million monthly active users. In 2020, the company witnessed double-digit growth in categories such as Mysteries & Thrillers and Romance, as well as even bigger surges in downloads for Kids, Comics & Graphic Novels, and Cookbooks, Food & Wine.
This Zacks Rank #3 (Hold) company has launched Apple Books for Authors, which offers helpful resources on writing, publishing, selling, and marketing books on Apple Books. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple Podcasts: Apple’s podcast service is available in over 175 countries with programming in more than 100 languages. However, none of these are exclusive to Apple.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>