Apple (AAPL) Stock: Is Original Content Enough?


Apple Inc. (NASDAQ: AAPL)

Apple has been an interesting stock to follow as of late. While there have been several questions about the company’s ability to maintain growth in the smartphone industry, the stock has been on an upward trend. At the moment, it seems as though investors are focused and banking on the company’s original content plans. However, is this going to be enough? Perhaps more importantly, is this even a viable option? Today, we’ll talk about the company’s plans, why I have serious questions about these plans, and what investors should be watching with regard to AAPL ahead.

AAPL Plans To Bring Original Content To The Table

There’s no doubt that original content can be overwhelmingly successful. We’ve seen this time and time again with Netflix. Considering that this is a great way to drive success for other companies, Apple seems to have taken on the “Why can’t I do the same?” attitude.

As a result, stories broke recently reporting that AAPL is working on original content. The company is reaching out to some key players in Hollywood in an attempt to drive the content to their streaming service. The idea is that, by offering original streaming content, users will be more likely to become paying members because they’re itching for that next episode.

The plan is relatively simple. While AAPL hasn’t created their strategy just yet, they do plan on acquiring a small number of high-quality original scripted TV shows. The company is also considering acquiring movies; but that’s not on the top of the list at the moment.

Is This The Right Plan For Apple?

There’s no denying the fact that the company is a force to be reckoned with. Through the years, Apple has dominated the smartphone space, leading to an ecosystem of products that consumers can’t seem to get enough of. That is, until recently. Recently, growth in iPhone sales has been concerning, and we’re seeing more and more articles online about how to escape the AAPL ecosystem. So, the company needs to do something, and do it quickly. Unfortunately, I don’t think that original content is the best opportunity here.

At the end of the day, if the company does decide to get into the original-content game, they’re going to have to spend a massive amount of money. Not only will they need to acquire the content, they will also need to market it, and it’s important that they do so in a way that brings light to their offering that outshines competition like Netflix, Amazon Prime Video, Hulu, and others that already seem to have a stronghold in the space. At the end of the day, AAPL is going to need to capture it’s audience – many of whom are already trying to leave the ecosystem – as well as capture audiences that are happy with the services they already use. For me, competition makes this plan a tough sell.

What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team is going to keep a close eye on AAPL. Of course, we’ll be watching for more news surrounding the original content story, but that’s not all we’re watching. In particular, we’re keeping a close eye on the iPhone and how well it performs throughout the year. 2017 could be a make it or break it year, and if it’s broken, we could see a big reversal as investors show concerns. Nonetheless, we’ll be watching the news closely and bringing it to you as it breaks!

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[Image Courtesy of Wikipedia]


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