Apple Inc. (NASDAQ:AAPL)’s annual Worldwide Developers Conference (WWDC) begins today with a 10:00 a.m. PT keynote presentation. WWDC is primarily focused on software and the corresponding services that are integral to the success of Apple’s portfolio. Thanks to Apple’s array of hardware devices, the company has created the most powerful digital ecosystem in the mobile device sector.
Subsequently, Cantor analyst Brian White is weighing in with a few insights on AAPL straight from the conference. The analyst believes that Apple’s digital ecosystem is often under appreciated, operating in the shadow of the company’s mobile device portfolio. However, according to White, Apple’s digital matrix is rapidly expanding its reach beyond traditional mobile devices and into wearable technology, the smart home, the connected automobile and elsewhere. He noted, “We believe this ever-expanding and seamless digital matrix remains a key differentiator, and we expect this will only leave more competitors behind in the coming years.”
In addition, the Wall Street Journal has reported last week that Apple is preparing to launch a direct rival to Spotify AB and other popular services that let users stream songs instead of buy them. The tech giant is expected to unveil the music streaming service at the WWDC. The Wall Street Journal estimates Apple will charge $10 per month for this new music streaming service.The WSJ estimates Apple will charge $10 per month for this new music streaming service.
Given the plethora of media reports over the past couple of weeks, the analyst believes that “Apple Music” will be introduced during today’s keynote, leveraging the $3 billion acquisition of Beats and Apple’s long history in the digital music business. White noted, “We believe this potential new service can enhance the company’s digital ecosystem, rather than move Apple’s financial needle. Regarding an announcement about a potential new Apple TV streaming service, a host of media reports over the past couple of weeks (and we believe telegraphed by Apple) have shot down the notion due to stalled negotiations with networks.”
The analyst rates Apple shares a Buy with a $195 price target, which implies an upside of nearly 52% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian White has a total average return of 18.5% and a 73.1% success rate. White has a 29.7% average return when recommending AAPL, and is ranked #20 out of 3612 analysts.
Out of the 55 analysts polled by TipRanks, 35 rate Apple stock a Buy, 17 rate the stock a Hold and 3 recommend a Sell. With a return potential of 15.94%, the stock’s 12-month consensus target price stands at $148.84.