Apple (AAPL) - Get Report is set to reveal its long-awaited video service -- and speculation is flying about what it will be, and what effect the announcement will ultimately have on Apple's share price and valuation.
On Monday, Apple is expected to show off a new subscription video service, as well as a revamped Apple News. Both could serve as anchors for Apple's growing services business.
TheStreet will be conducting a live blog breaking down Apple's event on March 25. Please check our home page then for more details.
Apple became the first company to exceed a $1 trillion market cap in August 2018, though it dipped significantly below that in the fall's tech swoon, before recovering to just over $900 billion as of Friday. So will Apple's new services offering help push Apple's valuation back to new heights?
Many analysts are feeling optimistic ahead of the announcement, with several jacking up their price targets to between $215 and $225 per share. Apple shares rose 2.7% during the week on the backs of those upgrades, ending the week at $191.18.
It's worth noting that Apple product reveals, at least where hardware announcements are concerned, have seemingly lost some of their power to move the stock dramatically. For instance, Apple's 2017 reveal of the iPhone X produced a move of -0.9% three days after the announcement, which was the worst stock market response to a new iPhone, according to data from IG Group.
But it's a different ballgame now, with Apple forging a new path into services and away from its iPhone-centric revenue regime. Apple has sought to shift focus away from iPhone unit sales and towards its installed base of 1.4 billion Apple devices worldwide.
According to CFRA Research's Angelo Zino, much of the market's reaction will likely be tied to the library of third-party content available -- from networks like Starz or Showtime -- and to the price of the service. In a research note this week, Zino suggested that Apple may undercut competitors like Netflix (NFLX) - Get Report on price.
"If we get the answers we're looking for, and they offer enticing content, attractive bundling options and pricing packages with those options, if we have a launch date somewhere in summer or fall -- if the stars align, I think investors out there will reward the stock," Zino told TheStreet. "If they don't line up the way we're anticipating, if the third party offerings are lackluster and pricing options aren't enticing, I think you'll see a negative reaction in the stock price."
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