Apple (AAPL) - Get Report announced on Thursday that it was getting into original content, despite venture capitalist and member of the Trump transition team Peter Thiel telling the New York Times today that the age of Apple was over.
The tech giant wants to invest in exclusive content to help boost its $10 a month Apple Music subscription number to help it compete with established music streaming player Spotify. But Apple is late to the original content game, considering Netflix (NFLX) - Get Report already has plans to spend $6 billion in 2017 on content.
"Go small and cautiously" seems to be Apple's motto for this new venture, BGC Financial Director of Research Colin Gillis said with a smile on CNBC's "Power Lunch" on Thursday afternoon.
Not only is Apple late to the exclusive content game, it also doesn't know if it's a smart move that will create meaningful value considering Netflix is already the "firm number one" in the space, Gillis noted.
In addition, the firm has concerns about Apple's supposedly growing services business, he said. "Not only are we concerned about Apple missing big trends like artificial intelligence, augmented reality, virtual reality and home automation. But the services layer that everyone points to is still a bit lackluster."
For example, Apple Pay has been out for about two years and hasn't done anything meaningful in the space, he noted. "This services layer that everyone talks about needs some beefing up."
The firm has a "sell" rating and $85 price target on Apple stock.
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