Morgan Stanley predicts Apple TV+ to be a $9 billion business

Apple TV+ with Tim Cook
Apple TV+ with Tim Cook (Image credit: Apple)

What you need to know

  • Morgan Stanley predicts Apple TV+ to be a $9 billion business by 2025.
  • They also have adjusted its target price of Apple's stock to $289.
  • The company continues to be their "top pick into 2020".

Apple's services business is set to grow by 20% next year according to Morgan Stanley analyst Katy Huberty. Reported by CNBC, she released a note on Wednesday that detailed the firm's position on Apple's stock price and its prediction for the success of Apple TV+.

Huberty believes that even with growing competition in the streaming market, that Apple TV+ will grow into a $9 billion business by 2025:

"With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25."

Morgan Stanley has also raised its target price for Apple stock from $247 to $289, a 17% increase supported by its outlook for Apple TV+ as well as its prediction that many people will upgrade to the 2020 iPhones.

"With a growing list of catalysts, including accelerating Services growth and multiple expansion ahead of the 5G iPhone launch, and an attractive 8% total dividend + buyback yield, we continue to view Apple as our top pick into 2020."

Apple TV+ launches on November 1st for $4.99 per month for up to 6 people for those who use Family Sharing. Apple is also running a limited-time promotion to get a free year of service if you buy a new iPhone, iPad, Mac, or Apple TV.

Joe Wituschek

Joe Wituschek is a Contributor at iMore. With over ten years in the technology industry, one of them being at Apple, Joe now covers the company for the website. In addition to covering breaking news, Joe also writes editorials and reviews for a range of products. He fell in love with Apple products when he got an iPod nano for Christmas almost twenty years ago. Despite being considered a "heavy" user, he has always preferred the consumer-focused products like the MacBook Air, iPad mini, and iPhone 13 mini. He will fight to the death to keep a mini iPhone in the lineup. In his free time, Joe enjoys video games, movies, photography, running, and basically everything outdoors.