Apple (AAPL) Needs To "Forge/Attract/Acquire Gaming Partnerships" - Bernstein

In a lengthy note to clients Friday morning, Bernstein analyst Toni Sacconaghi Jr. said Apple (NASDAQ: AAPL) needs to enhance its content offering by making some sort of acquisition.

To wit (emphasis ours): "We believe the biggest opportunities for Services growth are to expand the attractiveness and ease of use of the App Store, where less than half of all users transact today; continue to forge/attract/acquire gaming partnerships; and to look to offer enhanced content offerings (either through an OTTP service, or through a Netflix/Amazon Video type model, with original programming)."

Addressing the content issue further, the analyst wrote "Apple has long commented that television is an area of "intense interest" for the company, but the company has not been able to create the OTTP offering that many believed it might be uniquely positioned to do. At this point, it appears increasingly unlikely that Apple can negotiate the rights to be able to provide a complete OTT service, suggesting that it may need to look to aggressively acquire or (more likely) license content."

The comments follow Apple's recent earnings call and Sacconaghi Jr. believes that Apple will need to focus internally on improving its Service offerings if the company is double its service revenues over the next four years.

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