Apple TV+

What you need to know

  • Keybanc's Andy Hargreaves isn't impressed.
  • He believes that tracking Apple isn't attractive as a services co.
  • Apple leans on services more and more with new ones still to come.

Apple's services business may already be larger than Apple was just ten years ago but that doesn't mean everything is all rainbows and unicorns. At least, not if you listen to Keybanc analyst Andy Hargreaves.

In an interview with CNBC Hargreaves argued that if Apple is going to be seen as a services company moving forward, it should be judged as such. And when you do that, things don't look too rosy.

"If we are to call Apple a services company, we should evaluate it on typical services metrics of user growth and revenue and profit per user," he continued. "Apple's user growth is decelerating due to market saturation and its gross profit per user has been declining. ... These are not particularly attractive metrics for a services business."

Hargreaves also thinks that Apple's fiscal 2020 earnings per share will be $12.50, down from the $12.68 that appears to be the general consensus among other analysts.

The important thing to remember here is that while Apple is currently pushing out more services every month, it isn't a services company. It sells millions of iPhones every year. It sells millions of Macs and iPads, too. It's a hardware and services company the likes of which we might not have seen before. For that reason trying to compare it to other services companies might not be the smartest move to make right now.