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Subscription Service Stocks With Big Growth: Apple (AAPL)
The biggest company in the world, Apple (NASDAQ:AAPL), is known for making tried-and-true consumer technology hardware products like the iPhone, iPad and Mac. But, those markets are pretty much all dried up now.
Apple, however, isn’t done growing. Those markets are dried up because everyone already has an Apple hardware product. Now, Apple is attempting to monetize that massive ecosystem of Apple hardware users through various subscription services like App Store, iCloud and Apple Music.
These subscription services amount to what Apple calls its “Services” business. This business accounts for 15% of revenues, and is growing at a 30%-plus clip.
It also has higher margins and greater predictability than the notoriously lumpy and low-margin hardware business.
Consequently, as Apple’s Services component ramps over the next several years, Apple’s profits will get a big boost, and that should drive AAPL stock higher.
Source: Investor Place