Investment bank Cowen believes that Apple News+ is an important pillar of Apple’s service development, and predicts that by 2023, Apple News+’s paying users may reach 19 million. In a note to investors, Cowen chief analyst Krish Sankar predicted that by 2023, Apple’s News+ revenue may grow to $2.2 billion, with a compound annual growth rate (CAGR) of 31%.
“We believe that Apple ‘s news application and News+ paid subscription service (news platform) are fully prepared to not only benefit from the increase in incremental users, but also from the accelerated growth of advertising revenue,” Sankar Write.
He believes that Apple News+ can be supported by improving the advertising platform and getting rid of the Identifier for Advertisers tracking tags used on mobile devices after the application tracking is transparent. Sankar added that this privacy feature may be a “disruptive event” that provides a level playing field for advertising networks in the iOS ecosystem.
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The analyst added that due to the maturity of Apple’s search advertising (ASA) on the App Store, Apple’s advertising business may be on an encouraging track. Apple’s use of the ASA and recent changes to IDFA may accelerate Apple News’ advertising revenue in the next few years.
Cowen currently simulates a 36% increase in Apple News advertising revenue in the next three years, higher than the 30% in the previous three years.
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