Advertisement
U.S. markets closed
  • S&P Futures

    5,304.25
    -4.00 (-0.08%)
     
  • Dow Futures

    40,140.00
    -36.00 (-0.09%)
     
  • Nasdaq Futures

    18,465.00
    -38.75 (-0.21%)
     
  • Russell 2000 Futures

    2,145.20
    +6.80 (+0.32%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0784
    -0.0009 (-0.09%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • Vix

    13.01
    +0.23 (+1.80%)
     
  • GBP/USD

    1.2628
    +0.0006 (+0.04%)
     
  • USD/JPY

    151.3940
    +0.0220 (+0.01%)
     
  • Bitcoin USD

    70,886.95
    +1,464.95 (+2.11%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,343.40
    +175.33 (+0.44%)
     

Will Apple-Hollywood Partner to Offer Original Content?

Apple Inc AAPL is planning to collaborate with Hollywood for original television content as per a recent report from The Wall Street Journal. The iPhone-maker has long been rumored to develop original content on the lines of Netflix NFLX and Amazon AMZN Prime. However, nothing material has been revealed in the last 18 months.

Although Apple Music offers few documentaries on musicians they are nothing compared to serious programming available in Netflix or HBO. According to sources, Apple is currently engaged in discussions with veteran producers for buying rights to original scripts.

According to the Wall Street Journal, Apple Music has already acquired the rights of a half-hour version of “Carpool Karaoke,” which is currently a segment on CBS’s “The Late Late Show with James Corden.” The company is also developing a semi-biographical television series on Beats co-founder and hip-hop legend Dr. Dre. (Read More: Apple Filming Its First TV Series; Executive Producer is Dr. Dre)

Further, Apple is planning to hire senior marketing executives from different studios to promote its television contents. The company is anticipated to start offering original programming by the end of 2017.

However, it is believed that Apple’s current intent is not to challenge Netflix or HBO, both established names in streaming original content. Instead, the company will focus on promoting its carefully selected content through Apple Music, which it hopes will give the comapny a competitive edge over Spotify.

Original Content to Boost Top-Line

Apple is currently searching for ways to boost its top-line growth, which declined in 2016 for the first time since 2001. Notably, iPhone unit sales were down 8% year over year. Sluggish demand for iPhone is a major concern for Apple as the device alone contributes about 60% to the company’s total revenue.
 

Apple Inc. Price and Consensus

 

Apple Inc. Price and Consensus | Apple Inc. Quote

Further, it has been planning to make the upcoming iPhone 8 a big success by offering features like a glass body, a dual curved edge-to-edge OLED display with a built-in Touch ID sensor, metal forging and wireless charging. Moreover, Apple is rumoured to launch three iPhones (instead of two) including a new 5.8 inch model. (Read More: Apple's iPhone 8 Rumored to Feature New Characteristics)

Moreover, the iPhone maker’s plan to offer original content through the music streaming service will drive up Apple Music’s subscriber base. Although the service has more than 20 million paying subscribers, it is less than half of what Spotify reports. (Read More: Apple Music Achieves 20 Million Paying Subscribers).

Further, the company stated that sales from Apple Music surged 22% year over year in the fourth quarter of fiscal 2016. We believe that addition of original content will improve the stickiness of the service that will boost subscription revenues in the long haul.

Stock Price to Rebound in 2017?
 
Apple’s growth stalled in 2016 as shares underperformed the Zacks Computer Mini industry in the last one year. Apple shares gained 19.8% in comparison with the industry’s increase of 21.4%. However, we expect the launch of new iPhone, Augmented Reality (AR) product and growth app business to help the stock rebound in 2017.



Currently, Apple carries a Zacks Rank #3 (Hold). Exa Corporation EXA with Zacks Rank #1 (Strong Buy) is a better-ranked stock in the broader market. You can seethe complete list of today’s Zacks #1 Rank stocks here.

Current year estimates for Exa has remained steady at a loss of 17 cents per share in the last 30 days.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
 
Netflix, Inc. (NFLX): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Exa Corporation (EXA): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Advertisement