J.P. Morgan: Apple One will drive ‘sizable revenue upside’

Fitness+ may draw thousands of stand-alone subscribers, says analyst Samik Chatterjee, but Apple One will get millions.

From a note to clients that landed on my desktop Friday:

Fitness+ synergies with Watch and Apple One Premier, but ramp in content will take time. While comparisons with Peloton’s Digital subscriptions are likely, investors should be mindful that the depth of content on any new service takes time to ramp. However, the synergy with the platform for Health & Fitness and Apple Watch hardware is undeniable and adds to reasons for customers to choose the iOS ecosystem and Apple Watch. Additionally, increasing relevance of digital fitness and coaching, a largely nascent market till a couple of years ago, will help in driving adoption.

Early engagement to be driven by access through Apple One Premier. We believe the early engagement for Fitness+ app will be driven by users accessing it through subscription to the Apple One Premier plan – which we expect to be the primary portion of all Apple One subscriptions. While Fitness+ stand-alone subscribers and direct revenue is expected to remain limited, we expect the strong adoption of the Apple One Premier bundle and the value in that bundle attributable to Fitness+ to be the primary driver of revenue that can be attributable to Fitness+.

Estimate Apple One to drive 200-300 bps of upside to Services in FY23. Apple One leverages the success of Apple Music and we would expect Music family subscribers to see strong value in the Premier subscription, driving adoption in the millions, while subscribers to Fitness+ stand-alone subscriptions remain in ‘000s. However, Fitness+ adds value to Apple One subscriptions, which we estimate will drive 200-300 bps of upside to Services revenue in FY23 from incremental revenue capitalized on through the bundled offering.

Maintains Overweight rating and Street-high $150 target. 

Cue the chart:

apple jpmorgan fitness plus

Click to enlarge. 

My take: Apple things equal, I wouldn’t subscribe to Fitness+. But I’ll get it because swapping my current family plan for an Apple One premier bundle makes sense.


  1. Jerry Doyle said:
    It is disconcerting to be compelled to select a bundle of services where inside that bundle the consumer may not desire a particular service(s). I rather see a bundle based on “quantity of services” chosen and the consumer allowed which services go into that bundle.

    September 18, 2020
    • Dan Scropos said:
      Agreed. This could have been pick 2 for X, pick 3 for X or get them all for X. I’ve had 2 or 3 friends tell me they don’t see a bundle that has what they truly desire. Apple has always been about choice and simplicity. This seems counter to that, at least to some degree.

      September 18, 2020
  2. Dave Ryder said:
    As long as the bundle I buy is less than the a la carte prices of the services I really want then I’ll go with the bundle. If not, I’ll go a la carte.

    September 18, 2020
  3. Thomas Larkin said:
    I think Apple has better information when it comes to bundling, and the potential advantages to be derived, including how to get people to try more and thereby expand their use of services.

    September 18, 2020
  4. Jerry Doyle said:
    There is a distaste about paying for a service you do not use that reminds me of the antiquated cable service rendering days of paying for channels you never watch.

    September 18, 2020
  5. Mordechai Beizer said:

    I have Amazon Prime because I value the free two day delivery. I watch Amazon Prime Video every once in a while but I certainly would not subscribe to it as a standalone service. Funny thing though, I’m not at all bothered at having additional services bundled into my Amazon Prime subscription.

    I guess it depends on the value you associate with that which you are paying for. I was annoyed by my cable bill because Verizon kept on telling me that they were raising the fees because of all the new bundled channels that they were adding (none of which I wanted). If they had held the price the same I would not have cared what they added.

    September 18, 2020
  6. Kirk DeBernardi said:
    Now that I think of it, there might be more than what meets the eye here and maybe the brilliance of Apple’s bundling matrix CURRENTLY is that they believe most people will “come along” EVENTUALLY into getting the Premier plan with the 2T storage (shareable) being the absolute lock-in for most people’s lives for all the connected Apple goodness.

    It might take awhile, but what a gradual building block process for the ecosystem.

    September 18, 2020

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