Become a MacRumors Supporter for $25/year with no ads, private forums, and more!

MacRumors

macrumors bot
Original poster
Apr 12, 2001
54,606
16,739


Morgan Stanley analyst Katy Huberty today raised her services-related revenue forecast for Apple through the 2022 fiscal year.

applegoogle.jpg

In a research note shared with MacRumors, Huberty said stronger licensing revenue is the primary driver of the raised estimates, including an acceleration in the search traffic-related payments Apple receives from Google. The New York Times last year reported that Apple receives an estimated $8-12 billion per year in exchange for making Google the default search engine on devices like the iPhone and iPad.

"Following strong March quarter App Store results and an analysis of the key drivers of Apple's Licensing & Other segment, we raise our already above-street FY21 and FY22 Services revenue estimates by 3% and 5% respectively, and are increasingly convinced that consensus Services forecasts over the next 2+ years are too low," wrote Huberty.

Despite the positive outlook on Apple's services, Huberty lowered her 12-month price target for Apple to $155 from $164 per share.

"However, multiple compression over the last 2 months, primarily at Apple's higher growth Services peers, more than offsets our higher revenue and earnings estimates, driving our new sum-of-the-parts based price target to $156, or 33x FY22 EPS, down from $164 previously," wrote Huberty.

Apple's service portfolio includes the App Store, Apple Music, Apple TV+, Apple News+, Apple Fitness+, Apple Arcade, iCloud, and more.

Article Link: Apple's Search Engine Deal With Google Expected to Drive Services Revenue Growth Through 2022
 

LeadingHeat

macrumors 6502a
Oct 3, 2015
751
1,833
I still don’t see how the “default” is a problem. Sure, everyone’s grandparents won’t end up switching, but the people who care about their privacy will.

And while it’s a steep price, it’s not like Google is the only one who can get that spot. If bing or DDG outbids them, I’m sure they’d take the default spot. Not nearly anti-competitive.
 

Piggie

macrumors G3
Feb 23, 2010
8,740
3,304
Apple "Privacy is our 100% most important focus as a company"

Google "Have a ton of money Apple"

Apple "Ok, that seems to have helped us change our mind in this case"

Amazing really isn't it that Tim Cook can sit there, say what he says whilst keeping a straight face and yet still carries on like this.
 

sw1tcher

macrumors 68020
Jan 6, 2004
2,482
4,887
Despite the positive outlook on Apple's services, Huberty lowered her 12-month price target for Apple to $155 from $164 per share.

"However, multiple compression over the last 2 months, primarily at Apple's higher growth Services peers, more than offsets our higher revenue and earnings estimates, driving our new sum-of-the-parts based price target to $156, or 33x FY22 EPS, down from $164 previously," wrote Huberty.
Is it $155 or $156?
 

KidAKidB

macrumors 6502
Oct 1, 2014
302
999
Toronto
Apple "Privacy is our 100% most important focus as a company"

Google "Have a ton of money Apple"

Apple "Ok, that seems to have helped us change our mind in this case"

Amazing really isn't it that Tim Cook can sit there, say what he says whilst keeping a straight face and yet still carries on like this.
Apple's privacy stance never had anything to do with them actually caring. It was all because they saw they were falling so far behind in Machine Learning and AI that they changed course and claim to be focusing on Privacy so that they can save face.
 

honglong1976

macrumors 68000
Jul 12, 2008
1,523
967
UK
If Apple really cares about privacy, they wouldn't be doing this deal. At the end of the day, it injects a lot of money into Apple, but it is annoying when they go on and on about privacy like they actually care. It's their narrative, their marking and PR! This proves it's nonsense.
 

I7guy

macrumors Penryn
Nov 30, 2013
27,428
15,757
Gotta be in it to win it
Apple "Privacy is our 100% most important focus as a company"

Google "Have a ton of money Apple"

Apple "Ok, that seems to have helped us change our mind in this case"

Amazing really isn't it that Tim Cook can sit there, say what he says whilst keeping a straight face and yet still carries on like this.
Does somehow the internet magically change because google gives apple a dollar?
 

I7guy

macrumors Penryn
Nov 30, 2013
27,428
15,757
Gotta be in it to win it
If Apple really cares about privacy, they wouldn't be doing this deal. At the end of the day, it injects a lot of money into Apple, but it is annoying when they go on and on about privacy like they actually care. It's their narrative, their marking and PR! This proves it's nonsense.
Please explain and be specific how the internet changes by google giving apple one red cent?

To me it shows the value of the Apple platform and if Apple can get the money why not. After all, it's not like Apple has an under the deal table to siphon off it's customers' PII and give them to google.

Additionally, google must find the value in the additional traffic as well. IMO, google being a household brand name at this point, I believe many would pick google over the others.
 

MacStreamer

macrumors 6502
Aug 23, 2020
293
712
Does somehow the internet magically change because google gives apple a dollar?
I don't have a problem using anything Google, but we have tons of members who love to dump on Google at every turn while blindly defending Apple. Some members are just pointing out the hypocrisy in Apple's righteous privacy sermon by using this deal as an exampe.
 

now i see it

macrumors 604
Jan 2, 2002
7,571
15,242
While I am guilty of visiting YouTube with a browser (with ads blocked), that's the only service of theirs I'll use. I don't even have a Google search bookmark for my browsers any more. Never use it.
I used to have a Google search bookmark next to my DDG search bookmark but every time I'd be tempted to tap in the Google search, I'd ask myself- do I want to be tracked and profiled for my search?
Answer was always no, so I'd click DDG instead.
In my mind at least, GGL has such a bad reputation for basically being a wiretapper that I can't bring myself to use any of their stuff.
Use an android phone? Thats insane.
 

I7guy

macrumors Penryn
Nov 30, 2013
27,428
15,757
Gotta be in it to win it
I don't have a problem using anything Google, but we have tons of members who love to dump on Google at every turn while blindly defending Apple. Some members are just pointing out the hypocrisy in Apple's righteous privacy sermon by using this deal as an exampe.
I understand the conversation regarding "the supposed hypocrisy of apple". Everyone is entitled to their opinion on the matter. My opinion, is there is no hypocrisy. Apple can criticize google and at the same time accept service fees from them.

It's not like this has changed in the last few years, despite the protestations of the vocal minority.
 

CarpalMac

macrumors 68000
Nov 19, 2012
1,535
3,625
UK
Is this simply to stop Apple developing their own search engine? I mean, it's not like they'd move over to Bing or Ask Jeeves etc...
 

citysnaps

macrumors G3
Oct 10, 2011
8,169
14,240
San Francisco
Apple "Privacy is our 100% most important focus as a company"

Google "Have a ton of money Apple"

Apple "Ok, that seems to have helped us change our mind in this case"

Amazing really isn't it that Tim Cook can sit there, say what he says whilst keeping a straight face and yet still carries on like this.

What's amazing is the non-stop whining about this. Apparently some really want Duck Duck Go or Bing or <xxx> to be the default search engine. Yeah, that would be a real knee slapper with over-the-top record breaking moans.

Don't like Apple's policies/direction. No worries. Take action. There are loads of other tech companies waiting for the unhappy to reward them with their currency. Easy.
 

99chickens

Suspended
Jan 6, 2020
61
79
Apple "Privacy is our 100% most important focus as a company"

Google "Have a ton of money Apple"

Apple "Ok, that seems to have helped us change our mind in this case"

Amazing really isn't it that Tim Cook can sit there, say what he says whilst keeping a straight face and yet still carries on like this.

How does Apple allowing Google to be a search engine provider violate any of its privacy policies?

It's a rhetorical question. I already know you have zero facts to support your position since Apple's position has never been that apps and services can't collect any information from anyone, and Google's native apps have to comply with the same privacy and security requirements as all other apps.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.