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Apple (AAPL) Strengthens Streaming Service With New Content

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Apple (AAPL - Free Report) is expanding its content portfolio with the launch of the much-anticipated movie, Killers of the Flower Moon, directed by Martin Scorsese. Distributed by Paramount, the movie will be the first Apple original to have a wider theatrical release.

The Leonard DiCaprio-starrer is set to have a limited release in theaters on Oct 6, which will be followed by a wider release globally on Oct 20, per 9TO5Mac. Following the theatrical release, the movie will be available (after a 45-day theatrical exclusivity window) on Apple TV+.

Apple is expanding its footprint in the entertainment industry with plans to spend $1 billion on producing movies, per Bloomberg. The partnership with Paramount for the distribution of Killers of the Flower Moon is a step in that direction.

Theatrical releases are expected to provide Apple with wider recognition as a movie producer. The iPhone maker has a solid pipeline of movies and shows for Apple TV+ streaming services and it is working with renowned directors like Matthew Vaughn and Ridley Scott to improve content for the service.

 

Apple Inc. Price and Consensus

 

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Strong Content Helps Apple TV+ to Face Competition

Apple TV+, despite having fewer subscribers than Netflix (NFLX - Free Report) and Disney (DIS - Free Report) , has been gaining recognition due to its impressive content portfolio that includes shows like Ted Lasso. Its animated movie The Boy, the Mole, the Fox and the Horse won an Oscar for Best Animated Short Film this year. Last year, Apple won three Academy Awards for CODA.

Apple’s impressive run at the Academy Awards has been instrumental in driving recognition of Apple TV+ in the saturated streaming market currently dominated by the likes of Amazon (AMZN - Free Report) , Netflix and Disney+.

Apple TV+ is also expanding into different genres like live sports and is set to stream Friday Night Baseball, a weekly doubleheader, beginning Apr 7.

Growing Services Revenues to Aid Growth

The growing popularity of Apple TV+ and services like Fitness+ have been beneficial for Apple’s Services business, which has become a major revenue-generating source in recent times.

The Services portfolio currently has more than 935 million paid subscribers and accounted for 17.7% of sales in the fiscal first quarter. Services revenues increased 6.4% from the year-ago quarter to $20.77 billion.

For the fiscal second quarter, Services revenues are expected to grow year over year despite challenging macroeconomic conditions, as well as weakness in digital advertising and gaming.

Apple shares have outperformed the Zacks Computer and Technology sector in the past year. While AAPL shares have declined 9.8%, Netflix, Disney and Amazon shares have fallen 13.4%, 31% and 41.9%, respectively.

The Zacks Consensus Estimate for Apple’s fiscal second-quarter earnings has been unchanged at $1.44 over the past 30 days.

This Zacks Rank #3 (Hold) company expects the fiscal second quarter’s year-over-year revenue growth to be similar to that of the December-end quarter due to unfavorable forex. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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