Apple (AAPL - Get Report) investors anxiously awaited the company's announcements on Monday of specifics about new offerings in the tech giant's most promising and profitable segment: services. 

And that's what they got. But not completely. 

Apple's new offerings demonstrate a push for original content in both entertainment and gaming, and most of the offerings are under a subscription model. 

But Wall Street was left both hungry for more information -- pricing wasn't given for its premium streaming video service, nor for its gaming one -- and unsure of just how lucrative these services will be in a few years. The stock fell 1.21% on the day the announcements were made on Monday, but was rising 1.65% to $191.81 share in trading on Wednesday morning. 


The announcements "offered more breadth than investors expected, but at the same time it failed to offer the same depth that investors would have liked to see to position each category for success," said JPMorgan analysts in a note out Tuesday morning. As for the actual services, not all of them are so great, the analysts said. 

Apple TV Plus, which  offers "little value for users outside of the convenience of access to all subscriptions through one application, likely left investors disappointed on the value proposition that would allow it to compete effectively against large streaming players," JPMorgan said. While the service does produce original content, as Apple will dole out large sums to top talent like Reese Witherspoon and Oprah Winfrey, so does Netflix (NFLX - Get Report) . Meanwhile, JPMorgan emphasized, Apple TV Plus users must pay a subscription fee for each content provider they watch. Apple TV merely offers "convenience," the analysts said. 

As for Apple News Plus, the $9.99 per month subscription that allows users to access a huge assortment of papers and magazines, "the new subscription offers limited incremental functionalities to the Texture app, which already allowed customers to access content from 200 leading magazines," JPMorgan said. There are now 300 publications to choose from. 

"Apple Card offers several customer benefits that might trigger significant adoption," the note said. Users' cash back is to the tune of 3% for items purchased from Apple, 2% for items purchased using Apple Pay and 1% for every other purchase. 

Although JPMorgan is slightly tepid on the value-add these new services provide users, it values the services segment at a trailing earnings multiple of 25, viewing its upside as still strong. The bank's price target is $228, representing 21% upside. 

Morgan Stanley 

"The breadth of Services launches and content partnerships was impressive but lack of details on pricing and potential for bundling makes it difficult to quantify financial impact," said Morgan Stanley analysts in a Tuesday morning note. Morgan Stanley, which has long been bullish on Apple for its services potential, is raising its price target to $220 from $197 on the back of "upside bias" to the services story, as Apple could bundle hardware and services in the long run. 

But for now, "we learned very little about Apple's pricing strategy," Morgan Stanley said, with specific reference to gaming and TV. 

On the positive side, "the most important the breadth of content partners that have signed up to work with Apple across news, gaming, and TV." 

Goldman Sachs 

"None [of the services] seem likely on our calculations to materially impact EPS in the short term," Goldman Sachs analysts said.

Although JPMorgan touts strong adoption of the Apple Card as more likely, "we would expect the typical consumer to perceive the cash return rate to be OK but not great," Goldman said, because many transactions are likely to return 1% cash to the user, against 1.5% on competing cards like American Express (AXP - Get Report) . Assuming a specific take-rate and number of transactions, Goldman analysts were expecting revenue from Apple Card of $882 million and additional earnings per share of 12 cents by 2020. 

Meanwhile, Goldman is looking for $306 million of revenue and EPS of 5 cents in 2020 for Apple News Plus. 

The bank thinks Apple TV Plus could generate $3.6 billion in revenue and 11 cents of EPS in 2020, but that assumes roughly $15 in monthly subscription fees and a reach of 20 million users, but actual pricing remains speculative for now.


Regarding Apple TV Plus, "We see limited pricing power given the small content library at launch, and if Apple is playing the long game here, it could pressure financials for years," Jefferies wrote in a Tuesday note. Jefferies said it expects subscriptions to be priced lower than Netflix's $12.99 a month, a bearish tone compared to Goldman's. Jefferies' price target is $160. 

Cannacord Genuity

Cannacord analysts raised their price target to $230, as the bank expects Apple to accrue over 500 million subscribers to its various services by 2020. 

Related. Analysts Are Finally Applauding Apple's Services Story.

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