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Apple's (AAPL) Path To A Trillion Dollar Marketcap - Bernstein

May 18, 2016 9:19 AM EDT
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Price: $171.48 -1.06%

Rating Summary:
    39 Buy, 25 Hold, 7 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Bernstein analyst, Toni Sacconaghi, lays out the path for Apple (NASDAQ: AAPL) to avoid the boom and bust valuation swings of a hardware company by switching to a hardware/software/entertainment as a service model bundling all the components together into an "Apple Family Plan". No change to Outperform rating or $135 PT.

His hypothetical example (his own family) requires 3 iPad Minis, 1 iPad Air -each with a three-year replacement cycle; and 3 iPhones, each with a 2-year replacement cycle. In his example, it could cost "only" about $140 per month, well below his current monthly cable bill and wireless bill. Adding Apple Music for $15 per month; iCloud storage for $10 per month; and a speculated but yet to be released OTTP television offering for $40 per month increases it to an estimated $207/month, still a savings.

The company already seems to be taking steps in this direction with the iPhone upgrade program but the transition to a full subscription model is likely to be more disruptive to both the financial statements and business relationships with the Telcos.

For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $93.49 yesterday.



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Toni Sacconaghi