Apple's financial report in the first quarter of this year shows that iPhone X sales are not very good. Morgan Stanley analysts believe that, instead of focusing on equipment sales, Apple's services and smart watches will become the engine of growth for major revenue in the next five years.
The analyst said that although Apple has been vigorously promoting iPhone revenue growth, but this trend is gradually changing, Apple's half of revenue growth is generated by Apple's services.
At present, Apple's revenue per device is about $30. Although it is higher than $25 two years ago, this increase is far lower than the long-term revenue potential of services. At present, most Apple users do not pay for services, which means that each active user's income will be higher than 30 US dollars, or even double, may be close to 100 US dollars or more.
The analyst believes that Amazon Prime has approximately 106 million users, each paying approximately US$99 per person; Netflix has approximately 111 million users, each paying approximately US$120 per person per year. And Apple currently has only about 18% of paid users, and there is still a lot of commercial space.
Morgan Stanley believes that Apple still has the following commercial value that has not yet been officially discovered:
The growth of Apple Music is very fast. At present, only 2.9% of Apple users use it.
The number of iCloud users is growing, and Apple is launching two new data centers in China.
Apple Pay accounts for only 50% of the U.S. area and its usage is still low.
Morgan Stanley predicts that in the next five years, service revenue growth will account for more than 50% of Apple's total revenue growth. The iPhone has contributed 86% of Apple's revenue growth in the past five years and will account for 22% of revenue growth in the next five years.