Analyst: Apple working on new services, multiple iPhone refreshes per year

Morgan Stanley analyst Katy Huberty believes Apple’s introduction of not one, but two iPhones this year will lead to more frequent refreshes and increased unit sales in the coming year. She also sees new services coming down the pike in 2014. Huberty claims Apple will use both the iPhone 5s and the iPhone 5c to drive “multiple refreshes per year.” More than one device per year will provide the company with multiple launch events that can be used promote its iOS platform. It also will allow Apple to fiddle with the price point on its devices, so it will have a premium line and at least one that strikes a balance between affordability and profit margin. Looking beyond hardware, Huberty recently met with Apple CEO Tim Cook and CFO Peter Oppenheimer and left the meeting with some insight on the company’s plans for its services business. She doesn’t spill any secrets, but she does point to the new Touch ID fingerprint sensor as an example of how Apple can expand the functionality of the hardware and introduce new services. This would result in new revenue streams for the company. Services a meaningful opportunity. As we highlighted in our June 4, 2013 note, iOS usage stats far exceeds Android. Combining 575M+ high-end consumer accounts (most linked to credit cards or ACH) with investments Apple is making in cutting edge hardware, like the fingerprint sensor, and upgrading its installed base to the latest versions of iOS and OS X sets up for new services revenue streams, in our view. While the company consistently hits a homerun with its hardware and operating systems, its standalone software and services have been a struggle. iCloud is not as robust as offerings from Google and its iWork suite of apps have been the target of recent criticism. Apple has a few wins under its belt with the iOS App Store and iTunes Radio, so it is not all doom and gloom. It will be interesting to see how Apple moves forward in this services area in the coming year. What do you think Apple has up its sleeve for 2014? [Via MacRumors] Continue reading →

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