Apple Pay And Services Lead To Price Target Upgrade For Apple Inc. (AAPL)
Apple Inc. (NASDAQ:AAPL) has several products in its lineup that could surprise even though the company is predominantly known as an ‘iPhone-maker’. While, it is the iPhone that undoubtedly brings in the majority of revenues and earnings to the company. As per the analyst Ben Reitzes, Apple’s other products are bound to grow enormously in the future, especially in the company’s ‘services’ area.
Apple Pay Could Strengthen Margins
Reitzes noted in his research report that Apple Inc. (NASDAQ:AAPL)’s services have an exciting potential, which could be unlocked through expected initiatives that the company might take in the upcoming period. The services segment could translate into very exciting 100% margins for the company boosting overall margins.
More specifically, Apple Pay is something according to Reitzes that could become a profitable business and improve margins, provided the company moves to stretch it. Reitzes also has expectation that Apple Inc. (NASDAQ:AAPL) could soon release a video streaming service in the lines of Beats and could include it in its offerings across all iPhones by next year. This will serve as another stream of revenue for the company and could be a very significant tie in for the company between Apple TV and more.
Reitzes wrote, “A more comprehensive media service to integrate TV and subscriptions seem like a no brainer at some point.” Moving from services to devices segment, Barclays assumes lot of potential to be untapped through Apple watch. Moreover, it is anticipated that consumers will switch to large sized screens like iPhone 6 Plus and the full iPad over iPad mini.
The research firm is seeing lot of sales scope for iPhone 6 in China next year. On the basis of this analysis, the research firm has raised its price target for the iPhone maker from $120 to $140 per share, which resounds a great deal of confidence in the company.
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