Source: PaxForex Premium Analytics Portal, Fundamental Insight

Over the years, providing various services has become an increasingly important part of Apple's business. Paying more attention to this segment, Apple latterly extended it to incorporate music, video, games, fitness, and financial services, as well as App Store, AppleCare, and iCloud products. Last year, the company had revenue of $53.8 billion with an average gross profit double that of its hardware business.

Apple will likely continue to look for more ways to expand its services business in 2021. Here are three areas the company may consider going forward.

• Premium podcasts

Apple's standard podcast app remains the most common way to listen to podcasts. But Spotify has gained a strong foothold in the market, snapping up listeners from Apple and signing exclusive agreements with top podcast creators. Spotify has earlier stated that its podcast approach leads to a broader shift from free to paid listeners. Experts have lately questioned this thesis, and changes in Spotify's reporting for 2020 (allocating podcast content costs to the ad-supported segment) suggest that only free listening may be affected.
Apple reportedly plans to launch a podcast subscription product this year, as per the tech news website The Information.

It's difficult to imagine that Apple will have much progress in starting a premium podcast as a standalone service. Spotify is rumored to explore the concept but has not launched a podcast-only product. Certainly, podcasts are more of an add-on service that could fit in with a couple of other Apple services.

Apple could have added exclusive podcasts to Apple Music just as Spotify provides. It could easily engage users and keep them from moving over to Spotify.
Also, podcasts could work to support Apple News. Some Apple News sources enable the user to listen to stories instead of reading them. Podcasts could be an additional development of the service.

• Introducing new financial services

Currently, Apple already offers some financial services focused primarily on payments. In 2021, the company could expand its services to include those found in other e-wallet apps, such as Square's Cash App. 

Apple could also add investment accounts like those available to Cash App or Robinhood users. Analysts at Loup Ventures note that the Stock app "is already a must-have app for many investors, and the company could do more." They also suggest that Apple could offer Robo-advisory services like Wealthfront.

While Apple could produce earnings right from brokerage services, the real value would be in bringing more users into its financial services ecosystem. According to Square, the business gets three to four times more gross revenue from Cash App users who use multiple services in the app. So if brokerage services can spur more Apple Card subscriptions, it could be a highly lucrative part of Apple's business.

•  iPhone as a service

Apple is now offering an iPhone upgrade program. Paying a recurrent charge, customers receive AppleCare+ and can update their iPhone every 12 months. Besides, the Apple One subscription service is now offered, which includes up to six Apple services for a monthly fee and, notably, does not cover AppleCare.

Here, Apple has the option to connect the iPhone Upgrade Program with AppleOne, so users pay just one monthly bill to Apple and get just about everything the company has to offer.

While the iPhone already has a strong customer retention rate, the phone upgrade cycle has become much longer over the past few years. Pushing more consumers into a subscription model where they can upgrade every year will help reduce the average lifespan of an iPhone and drive additional sales of Apple's most valuable product.Adding a top tier to Apple One, which

includes the iPhone, AppleCare +, and possibly additional exclusive benefits or offers, could lead to a significant increase in revenue if the company introduces more regular upgrades.

Of course, Apple may not originate any of the abovementioned services, though shareholders should anticipate the services business to remain a focus of executives and experience additional renovations this year. The fast-growing segment is a principal driver for the business, but it is supported by existing robust services such as the App Store. Incremental changes this year with services such as those mentioned above won't have a vital meaning in 2021, yet they could be long-term drivers of Apple's broader ecosystem, driving the company's stock price higher.

While the price is above 125.00, follow the recommendations below:

• Time frame: D1
• Recommendation: long position
• Entry point: 143.00
• Take Profit 1: 147.00
• Take Profit 2: 154.00

Alternative scenario:

If the level 125.00 is broken-down, follow the recommendations below:

• Time frame: D1
• Recommendation: short position
• Entry point: 125.00
• Take Profit 1: 120.00
• Take Profit 2: 112.50