Apple (AAPL) raised as many questions as it answered during its Monday presentation.
Shares of the California-based tech firm broke out to a positive start on Tuesday, building on bullishness from Wall Street on its Services driven vision for the future.
However, there are still numerous question marks surrounding the myriad of new products that leaves room for caution for a company that encountered issues with its flagship iPhone offerings in 2018.
"The breadth of Services launches & content partnerships was impressive but lack of details on pricing & potential for bundling makes it difficult to quantify financial impact," Morgan Stanley analyst Katy Huberty commented.Skeptics on Streaming
One of the main angles of opacity is the company's streaming service initiative.
"Apple's event yesterday focused on launch of services and offered more breadth than investors expected, but at the same time it failed to offer the same depth that investors would have liked to see to position each category for success," JP Morgan analyst Samik Chatterjee lamented. "The launch of Apple TV+ as a pure aggregator, with little value for users outside of the convenience of access to all subscriptions through one application, likely left investors disappointed on the value proposition that would allow it to compete effectively against large streaming players despite being a late entrant in the market."
Instead of directly competing, they will take in services from HBO, Amazon (AMZN) Prime, CBS (CBS) and Viacom (VIAB) titles under one umbrella. The base channel will be bolstered by a premium subscription service that will seek to compete more directly with Netflix (NFLX) and Disney+ (DIS) .
The issue is that it may be too little of a buy-in from the company that could have made a much bigger splash if it wished to.
If Apple wants to kill Netflix, it need only flex a tiny portion of its considerable muscle.$NFLX is Blockbuster. It won't survive— Martin Baccardax (@mdbaccardax) March 26, 2019
The lack of transparency on cost is also a sticking point, as it makes assessments of its competitiveness with current industry players largely speculative.
"Although Apple indicated it would disclose pricing for the TV+ video subscription later, we believe Apple might be challenged in monetizing its own original content with users, given its limited scope relative to large content providers like Netflix, Amazon Prime, and [AT&T (T) ] HBO," Chatterjee warned. "Continuing on the recent strategic direction of offering Apple Services on non-iOS platforms, Apple will be making the TV+ video subscription on Samsung (SSNLF) smart TVs as well as on Amazon Fire TV, LG, Roku (ROKU) , Sony (SNE) platforms in the future."
Still, there may be a method to Apple's lack of detail, according to Real Money tech columnist Eric Jhonsa.Room for Caution on the Apple Card?
One of the more positive initiatives coming out of the presentation was the company's new credit card offering, the Apple Card.
"With the success and momentum of Apple Pay, we have learned a lot about credit cards," CEO Tim Cook said. "While we all need them, there's some things about the credit card experience that could be so much better like simplifying applications, eliminating fees, lowering interest rates, offering clear and compelling rewards, and of course, providing the security and the privacy that people have come to expect from Apple Pay."
The card, powered by a partnership between Goldman Sachs (GS) and Mastercard (MA) , poses a threat not only to PayPal (PYPL) by driving customers to Apple Pay, but also to Visa (V) , which is losing out to MasterCard for the partnership.
Still, many were not overly impressed and worried about the lofty promises on cash back and fee reduction.
$AAPL product innovation history— Sven Henrich (@NorthmanTrader) March 25, 2019
10s: a watch
19: Here's a credit card with no numbers on it.
Additionally, the release of the card is not slated for a number of months, meaning the impact of the card will not be felt immediately, if it can break the stickiness of Venmo's current market share dominance at all.Learned Too Little
Overall, the complaint that has come through is that Tim Cook simply didn't offer enough detail to investors on Monday.
"We learned very little about Apple's pricing strategy, beyond that Apple News+ will cost $9.99/month," Morgan Stanley's Huberty commented. "Only Apple News+ is available to consumers today, while Apple TV Channels will be available in May, Apple Card this summer, and Apple Arcade / Apple TV+ in the fall. Together, the lack of pricing details and later than expected launches make it difficult for the Street to quantify the impact of what was announced today, limiting perceived upside from new services near-term."
As such, there may be room to wait for detail before chasing Tuesday's stock pop, especially considering the stock's over 30% run from its pre-announcement plummet has it near technical barriers on the RSI.
(Apple, Disney, Goldman Sachs, Viacom, and Amazon are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.)
How Much Money Will I Need to Retire?
Want to learn about retirement planning from some of the nation's top experts? Join TheStreet's Robert "Mr. Retirement" Powell live in New York on April 6 for our Retirement Strategies Symposium. For a limited time, tickets are available for $99 for this full-day event. Check out the agenda, learn about the speakers and sign up here.