Apple will hit a $3 trillion market valuation thanks to increasing subscription revenue.
That’s according to Morgan Stanley, which says that Apple’s shift towards a subscription model will likely add up to one trillion dollars to its current market capitalization. Speaking of the news, a spokesperson for the bank said: “Apple’s industry-leading retention rates and expanding ecosystem of hardware and services have already created one of the world’s most valuable technology platforms that centralize and controls everything from traditional communication to entertainment, social media engagement, photo & video development, gaming, business, payments, travel, fitness, and more.”
The bank argues, though, that Apple will still need to be a traditional hardware maker if it wants to succeed. The report says Apple meets the five characteristics of a successful subscription business – high retention rates, targeting end-markets, a platform to increase spending, strong customer acquisition rates, and subscription-based pricing.
Apple has made some serious headway in recent years with subscriptions, launching a number of new services. Most recently, it’s launched Apple One, Apple Podcasts Subscriptions, and the company is also considering launching a new subscription service for the iPhone, effectively allowing consumers to ‘rent’ their devices rather than outright own them.
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