Investment bank Cowen believes that Apple News+ is a key pillar of Apple’s service development, and predicts that Apple News+ could reach 19 million paying subscribers by 2023. In a note to investors, Cowen chief analyst Krish Sankar predicted that Apple News+ revenue could grow to $2.2 billion by 2023, with a 31% compound annual growth rate (CAGR).
“We believe Apple’s News app and News+ paid subscription service are well positioned to benefit not only from incremental user growth, but also from accelerated AD revenue growth, “Sankar wrote.
He thinks Apple News+ could be supported by improving its advertising platform and getting rid of identifiers for Advertisers on mobile devices after being transparent about tracking apps. Sankar added that the privacy feature could be a “disruptive event” that levels the playing field for AD networks in the iOS ecosystem.
The analyst added that Apple’s advertising business could be on an encouraging trajectory due to the maturity of Apple Search Ads (ASA) on the App Store. Apple’s use of ASA and recent changes to IDFA are likely to accelerate advertising revenue for Apple News over the next few years.
Cowen is now projecting 36% growth in Apple News AD revenue over the next three years, up from 30% in the previous three years.