Apple to Launch Discounted Services Bundle, iOS Code Reveals

Analysts view Apple's services business as a linchpin of its valuation potential.
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Apple is planning to launch a services bundle soon, according to a beta version of an upcoming iOS release. 

The beta version of Apple's iOS 13.5.5, which was released this week, contains references to a subscription bundle that didn't exist in prior versions, suggesting that a services bundle could launch alongside that version of iOS. The code was first spotted by 9to5Mac. 

Apple  (AAPL) - Get Report shares closed 2.85% on Friday at $331.50, a new record-high closing price. 

Apple reportedly began negotiating with publishers and music labels over the details of a potential subscription bundle, which could wrap together Apple Music, Apple TV+, and Apple News+, or some combination of services, with a discounted price. When purchased independently, Apple Music and News+ each cost $10 per month; Apple TV+ costs $5 per month. Apple Arcade, Apple's mobile gaming service costs $5 per month. 

Analysts view Apple's growing services business as a linchpin of its valuation potential, and as helping to offset a difficult environment for device sales owing to COVID-19 supply and demand disruptions. 

In a recent note, Morgan Stanley analyst Katy Huberty forecast that Apple's services segment could bring in $63.7 billion in 2021, also raising her price target for Apple shares to $340 from $326.

On Thursday, Wedbush analyst Dan Ives wrote that pent-up iPhone demand towards the latter half of the year, combined with strength in its services business, could drive Apple towards a $2 trillion market cap by the end of next year. 

"Services and iPhone 12 [are] the '1-2 punch' further catalyzing shares higher," Ives wrote. "Looking out further, we believe by the end of 2021, Apple has potential to be the first $2 trillion valuation [stock] given the 5G tailwinds and services momentum potential over the coming years."

At a virtual WWDC kicking off June 22, Apple is expected to preview iOS 14 and other software enhancements, and perhaps hint at other product releases coming this year. 

Apple shares are up 10% so far this year.