Apple Expands Apple TV+ to Android, Eyes Subscription Growth and Ecosystem Expansion, Analyst Says

BofA Securities analyst Wamsi Mohan maintained a Buy rating on Apple Inc AAPL with a price target of $265.

Apple recently announced that the Apple TV App will be available on Android mobile devices (including phones, tablets, and foldables).

Instead of accessing Apple TV+ using a browser, Android users can have a better experience.

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From Apple’s standpoint, this announcement can help increase subscription revenue in the long term by making Apple TV+ more readily available and convenient to view on the Android installed base, which is much larger than the iOS installed base.

Beyond any financial benefit, it also helps make Apple more accessible to users of the Android installed base, which, over time, can help increase migrations into the iOS ecosystem.

The rerating reflects stable cash flows, earnings resiliency and potential beneficiary of AI use on edge devices.

Mohan assumed a Base case where, over time, Apple penetrates 1.5% of the Android installed base, which can support the Apple TV App. The analyst assumed users in emerging markets would pay a lower monthly charge. He estimated ~$2 billion in revenue and ~$0.02 EPS impact.

In addition, users can subscribe to the MLS season pass, which can drive some incremental revenue for Apple.

While the impact of mid-term revenue and EPS may not be significant, making more Apple Apps available on Android can help increase Apple brand awareness beyond the iOS ecosystem and drive future migrations.

The Android operating system (OS) has a dominant market share in emerging markets.

Mohan noted that iOS users tend to have higher ARPU for apps and subscriptions than Android users.

Moreover, Apple would have costs related to providing Apple TV+ on Android, including the platform fee paid to Alphabet Inc GOOG (NASDAQ” GOOGL) Google.

The analyst expects Apple to continue investing in original content to make Apple TV+ attractive to subscribers. Overall, he assumed a lower gross margin of 30% for the steaming subscription service versus an overall Apple Services gross margin of around 70%.

Mohan’s fiscal 2025E revenue and EPS remain at $411 billion and $7.30.

Price Action: AAPL stock is down 0.07% at $245.59 at last check Friday.

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