Apple Inc. is reportedly planning to launch new subscription offerings in the next few months, but one analyst thinks that Wall Street is hoping for more flashy announcements from the smartphone giant.
“We believe investors are looking forward to the firm exploring inorganic opportunities in services, potentially accelerating the transformation to services and helping offset the headwinds from the maturing smartphone cycle,” J.P. Morgan’s Samik Chatterjee wrote in a note to clients on Wednesday.
Chatterjee highlighted several recent leadership announcement at Apple AAPL, +0.30% that might help drive changes at the company. Apple’s former head of Siri efforts is no longer leading that group, and the company brought in a smart-lock expert to run its home-products business.
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“Investors will be closely monitoring the latest management changes over the weekend and are hopeful it will trigger progress towards leveraging the balance sheet for M&A,” Chatterjee said. The company reportedly purchased Pullstring, a company that allows for the creation of voice apps, according to an Axios story from Friday.
In a note published earlier this month, Chatterjee floated a couple of companies that might be logical acquisitions for Apple, including smart-speaker maker Sonos Inc. SONO, -0.61% and videogame publisher Activision Blizzard Inc. ATVI, -0.27%
“We believe the video gaming industry stands out to us as a potential sector of interest for Apple, particularly given the industry is rapidly transitioning to mobile,” Chatterjee wrote Wednesday, in response to a recent Cheddar report suggesting that the company was considering a gaming-subscription offering.
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Chatterjee has an overweight rating and $228 target price on shares. He wrote Wednesday that he sees potential signs of “stabilization” from his latest look at the revenue trends of Apple suppliers.
Shares are little changed in premarket trading. They’ve fallen 3.4% over the past three months, while the Dow Jones Industrial Average DJIA, +0.03% has gained 5.2%.
