Netflix exiting iOS App Store

“We believe the investing view on Apple is shifting to Apple as a Service,” Gene Munster writes for Loup Ventures.

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“The news that Netflix is leaving the App Store is somewhat expected, given the company began testing alternatives to the App Store last summer. The move is a fractional negative to earnings, along with a psychological headwind to investors embracing the theme of Apple as a Service,” Munster writes. “That said, we believe Spotify is the only other brand at risk of leaving, and the Apple as a Service theme is intact.”

“Netflix leaving the App Store only affects new subscriptions, therefore, the financial impact on Apple will be de minimis (0.07% of Apple’s overall revenue and 0.14% of earnings),” Munster writes. “If Apple loses their cut of all Netflix and Spotify subscription revenue long-term (not just new subscriptions), it would reduce the overall Services revenue by about 0.4%, and Apple’s overall revenue by 0.07%. This headwind would lower the Services growth rate in 2020 from 15% to 14%.”

Much more in the full article here.

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