JP Morgan is Stoked Over Apple Arcade and Apple Music
14 JUNE - News of a note from JP Morgan analyst Samik Chatterjee that’s kind of hard to parse. 9 to 5 Mac has the Chatterbox figuring revenue for Apple Arcade and Apple Music over the next few years. Combined, he expects the services to take in $8.2 billion by 2025 - nearly all of it coming from Apple Music. The piece has the analyst indicating that:
The two services are likely to have a combined subscriber base of about 180 million by 2025 – 110 million for music and 70 million for gaming – boosted by the rapid spread of the internet and a booming gaming industry…
You know I’ve been thinking of getting me one o’ them internets…
By his reckoning, the piece says Chatterjee thinks Apple Music will account for “$7 billion in revenue by 2025 while Apple Arcade is estimated to pull in $1.2 billion.”
What’s weird is the focus on Apple Arcade in both the 9 to 5 Mac piece and a piece on the note from Apple Insider. According to that report, Chatterjee is particularly fond of the stickiness of the Apple Arcade subscription model. He’s also a fan of the titles exclusive to Apple Arcade, rather than it being “aggregated content.” Additionally, he said the simplicity of games adds to the overall potential market,” according to Apple Insider.
Maybe? I know of one family (not a huge sampling, I’ll grant you) BUT I KNOW OF ONE FAMILY with two-kids and two-adults and an Apple One family bundle. The two-kids barely seem to know and certainly don’t care about the games in Apple Arcade. I was going to use that as an argument against Chatterjee’s thinking, then I remembered - the two adults are almost always hooked on one Apple Arcade game or another… so… okay, maybe.
As with many such notes, the chance of us ever knowing whether Chatterjee is correct is slim. Apple does not break out subscriber numbers for its various services. Still, his thinking reflects and adds to sentiment around the Apple Services story.
Chatterjee has a positive rating on Apple shares. His price target on the shares is $200.
