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Apple Disputes Goldman Sachs Analyst Report Claiming Free Year of Apple TV+ Will Impact Earnings

What I'm curious about is, do the subscriptions stack if you make multiple purchases? Does it start on day of purchase or day of registration?
Because there has already been 2 phones purchased. Very probably an iPad in before the end of the year. I'm very good on Macs at the moment though.
Apple has taken a GIANT chunk of my income this year.

18 Core iMac Pro
8 Core iMac
8 Core MacBook Pro
6 Core MacBook Pro
6 Core Mac Mini
S5 SS Apple Watch
several watch bands, several phone cases
2 - iPhone 11 Pro Max
6 sets of AirPods w/ wireless cases

can I get like a decade of AppleTV+ Tim ?
 
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Interesting tiff.

It’s highly unusual for a company to directly contradict an analyst in public, and exceptionally rare to do so during exchange trading hours.
 
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Pfft giving away a service most weren’t going to pay for anyway is the best advertising you can do to drum up interest and future subscriptions. Aside from that you have to buy a new device from Apple to get the free year, so Apple doesn’t lose anything in this deal.

This is just greedy shareholders wanting a fatter check while they turn the internet into a bigger wasteland than it already is. I would say the majority of consumers are already tired of subscriptions, micro-transactions, loot boxes, an tax abuse by greedy banks, stockholders, and mega conglomerates. Seriously turning everything into a nickel & dime grab is going to backfire.

The best thing Apple did was say hey, we have this new service if you buy a new device you can try it out for a year to see if it has value to you. If the series are good people will resubscribe for season 2, 3, 4... if it’s like Netflix though the series will most likely be cancelled with no closure/ending and people will stop watching any of them and subscribing because why invest time/money into something that won’t last. Apple has a lot to prove in this market, so does Disney for that matter. The difference is Disney now owns the largest catalog in Hollywood with some of the biggest franchise followings.
 
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Solomani said:
That analyst is clueless. He has no idea how powerful, how entrapping and addicting the Apple Ecosystem is. Once Apple customers get sucked into the Apple Ecosystem, it's very difficult to bail out. And often it starts with a Free Trial. Remember all the clueless analysts that said Apple Music would fail? That it would never ever compete or catch up to Spotify etc? LOL

Apple Music also started with free trials.
Click to expand...
what about news+
 
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Solomani said:
That analyst is clueless. He has no idea how powerful, how entrapping and addicting the Apple Ecosystem is. Once Apple customers get sucked into the Apple Ecosystem, it's very difficult to bail out. And often it starts with a Free Trial. Remember all the clueless analysts that said Apple Music would fail? That it would never ever compete or catch up to Spotify etc? LOL

Apple Music also started with free trials.
Click to expand...

I wouldn't equate Apple music to TV. Apple created the legitimate online music store, killed the CD and made streaming the norm. They were also operating with an early mover advantage and unimaginable scale. The whole freaking company was built around music from the early 2000's, from hardware to marketing.

In movies and TV Apple is no one. They're in a space where everyone already has a well-established streaming service and a distribution channel. To make things worse, one of their most trusted media partners, Disney, just went off with their own spectacular offering with a CENTURY worth of extremely valuable content. It does not matter how much $$$ is thrown at it, it's an uphill battle. Shareholders care about throwing away tens of billions of dollars, and that's why we're here today.
 
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Solomani said:
That analyst is clueless. He has no idea how powerful, how entrapping and addicting the Apple Ecosystem is. Once Apple customers get sucked into the Apple Ecosystem, it's very difficult to bail out. And often it starts with a Free Trial. Remember all the clueless analysts that said Apple Music would fail? That it would never ever compete or catch up to Spotify etc? LOL

Apple Music also started with free trials.
Click to expand...
You definitely have no clue about any of it. The analyst simply stated how this development would affect the accounting (and EPS as a result). This has nothing to do with ecosystem or Spotify or whatever.
 
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mmomega said:
What I'm curious about is, do the subscriptions stack if you make multiple purchases? Does it start on day of purchase or day of registration?
Because there has already been 2 phones purchased. Very probably an iPad in before the end of the year. I'm very good on Macs at the moment though.
Apple has taken a GIANT chunk of my income this year.

18 Core iMac Pro
8 Core iMac
8 Core MacBook Pro
6 Core MacBook Pro
6 Core Mac Mini
S5 SS Apple Watch
several watch bands, several phone cases
2 - iPhone 11 Pro Max
6 sets of AirPods w/ wireless cases

can I get like a decade of AppleTV+ Tim ?
Click to expand...
Doubt it, it will probably start with the first new device registered. Then it will tell you you’ve already used/registered your trial period when you register subsequent devices.
 
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Amazing Iceman said:
This large financial entities should screen their analysts opinions before letting them out to the public.
These narrow minded and cheap analysts are out of control.

A free year of AppleTV+ Is the best advertising campaign Apple could have chosen.
Encourages people to buy Apple products just to get the freebie, and also gives them a chance to try it and become addicted to it.
Click to expand...

It's not that often that my professional expertise is relevant on this forum but, let me offer some insight into what is going on here - Revenue Recognition, Bundles, and Multi-Element Arrangements.

To the customer, the service is being offered as free however from an accounting perspective Apple is combining two products into a single hardware + software revenue contract where one of the products is being discounted at 100%. Since this product has standalone value (something called SSP under ASC 606) Apple needs to apply an accounting policy that appropriately estimates how much recurring revenue uplift they will receive from people continuing to use AppleTV+ after the free trial..

What the analyst is concerned about is Apple taking the full $60 and moving it from hardware to services and overstating how much of their revenue growth is coming from selling new services (analysts prefer subscription services growth since it's recurring - so this number accelerating is beneficial to a company).

What is important to note here is that in Jan 2018 the way that every public company reports their revenue numbers changed under new regulation known as ASC 606. Companies, analysts, and auditors still have different opinions on how the principals of this new standard should be applied so disagreements like this have been really common over the past year and will continue to be for a few years. To put it another way.. the bugs are still being worked out with how companies recognize revenue.

Here are some good articles for people who would like more information:

https://www.accountingtoday.com/opinion/welcome-to-year-one-of-asc-606

https://www.investors.com/news/tech...oking-revenue-faster-could-shake-up-earnings/

https://www.accountingtoday.com/new...ouble-from-fasbs-revenue-recognition-standard
 
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zubikov said:
Cost: Apple already sank a lot of $$$ into TV+. Apple is expected to sink much more more $$$ in the future.

Revenue: Apple is playing accounting tricks to make is looks like a service is generating revenue, even though hardware is.

Profit: Apple will try to say it's a profitable service with growing revenue. The street called bs on them.
Click to expand...
How is this an accounting trick? I’m assuming Apple already treats some portion of hardware revenue as services. I mean if Apple broke out the components of the price of an iPhone surely some of that would go to software and services.
 
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mmomega said:
What I'm curious about is, do the subscriptions stack if you make multiple purchases? Does it start on day of purchase or day of registration?
Because there has already been 2 phones purchased. Very probably an iPad in before the end of the year. I'm very good on Macs at the moment though.
Apple has taken a GIANT chunk of my income this year.

18 Core iMac Pro
8 Core iMac
8 Core MacBook Pro
6 Core MacBook Pro
6 Core Mac Mini
S5 SS Apple Watch
several watch bands, several phone cases
2 - iPhone 11 Pro Max
6 sets of AirPods w/ wireless cases

can I get like a decade of AppleTV+ Tim ?
Click to expand...

I have seen reporting that the free subscription doesn’t stack. One time only per family.
 
Resse Witherspoon was on Ellen the other day talking about her new Apple TV+ show. Apparently everyone in the audience got a free Apple TV.
 
gugy said:
This was a smart move by Apple. If their content is indeed great, people will have time to get used to it and eventually keep it in the long run.

I am hoping Apple at some point creates a master subscription plan that includes all their services and iCloud storage at a fair price for individuals and families. That might entice me into jumping into other services that at this point I don't care about it.
Click to expand...

THIS.

I pay currently:

$9.99 iCloud Family Storage
$10.71 AppleCare+ My iPhone
$10.71 AppleCare+ Wife iPhone
$16.08 Apple Music
$10.71 Apple News

And I will get Appletv+ for another $4.99 plus tax. I will never get Apple Arcade but that would be another charge.

Even if you don't cut the price that much can you at least bundle it into one charge? It's getting ridiculous.
 
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Amazing Iceman said:
This large financial entities should screen their analysts opinions before letting them out to the public.
These narrow minded and cheap analysts are out of control.

A free year of AppleTV+ Is the best advertising campaign Apple could have chosen.
Encourages people to buy Apple products just to get the freebie, and also gives them a chance to try it and become addicted to it.
Click to expand...

You clearly have zero understanding of what a sell-side research analyst does (or is). The opinions of research analysts are protected by law as their function is to provide advice to institutional investors. This, of course, presents an inherent conflict between the investment banking side of the business (which would love to have the sell-side research analysts only publish positive opinions) and the research side of the business, which is supposed to provide advice without being influenced by investment bankers. The two sides are not even allowed to speak to one another without a compliance chaperone strictly monitoring the conversations.
 
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What's the ATV+ content, beyond a handful of titles? Seems like I'm missing something obvious here. For 2-3x, Netflix gives me a vast library, not six (and more to come!) checklist-satisfying items.
 
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coolfactor said:
There's no ads in Apple TV+, is there? I sure hope not.
[doublepost=1568400570][/doublepost]
Click to expand...
As far as commercial breaks, not sure, but remains to be seen. But pre-roll, or commercial breaks are not the only source of ad revenue. Lots of money involved with product placements and sponsored content.
 
Obviously a disgruntled Goldman Sachs Analyst who was unhappy with his Credit Limit on his Apple Card. No news here. 😉
 
Rogifan said:
Resse Witherspoon was on Ellen the other day talking about her new Apple TV+ show. Apparently everyone in the audience got a free Apple TV.
Click to expand...

Are you sure it was Ellen and not Oprah?

YOU get an AppleTV! And YOU get an AppleTV! And you over there, YOU get one too!
 
Strawman. Who are “all the clueless analysts” that said Apple Music would fail. I suspect an analyst from Goldman Sachs is a little more in tune than Solomani from macrumors.


Solomani said:
That analyst is clueless. He has no idea how powerful, how entrapping and addicting the Apple Ecosystem is. Once Apple customers get sucked into the Apple Ecosystem, it's very difficult to bail out. And often it starts with a Free Trial. Remember all the clueless analysts that said Apple Music would fail? That it would never ever compete or catch up to Spotify etc? LOL

Apple Music also started with free trials.
Click to expand...
 
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