With each day that goes by, Twitter (NYSE:TWTR) becomes increasingly entrenched in our lives. Obviously, the prevalence of this social media platform boosts the case for TWTR stock. Unfortunately, the same cannot be said about Apple’s (NASDAQ:AAPL) subscription news service Apple News+. It’s a wrinkle that could negatively impact AAPL stock.
Just to recap, earlier this year, the consumer technology giant announced a mobile-app service which aggregates various news sources. The idea here was both simple yet brilliant: provide readers with access to hundreds of magazines and leading newspapers, all in one place. And if market enthusiasm is any indicator, Apple stock steadily gained – after a brief volatile phase — following the announcement.
It’s no surprise that both Apple and the magazine/newspaper industry jumped on this symbiotic opportunity. For years, print publications have cratered, even in outlets such as grocery stores. Waiting in line at the checkout counter can sometimes be a frustrating experience. That’s why grocers target this area for magazines and other publications.
It’s been a great revenue source until digitalization disrupted everything. However, traditional print-media companies are warming up to digital trends: if you can’t beat them, join them. And this is the driving force behind Apple News+. Theoretically, it provides another revenue channel to further lift AAPL stock.
Just as importantly, Apple News+ gives the tech firm a chance to do some disrupting of its own. As mentioned at the top, Twitter has penetrated the mainstream consciousness. Naturally, TWTR stock has moved higher after slugging through its doldrums.
With elements like peak smartphone negatively impacting Apple stock, the underlying company could use another sales base. However, early indicators suggest that Apple News+ is no panacea.
Apple News+ Not Getting the Job Done for AAPL Stock
At first glance, Apple News+ sounds like a great deal. For only $10 a month, you get access to real journalism, not the “fake news” that sometimes infiltrates social media. Moreover, for those who really value the written word, the service is very comparable to Netflix (NASDAQ:NFLX). Already, this sounds like a winner, which could go a long way to supporting AAPL stock.
Plus, Apple brings some goodies to the table. For example, under the marketed family-sharing plan, family members automatically gain access to News+ once you join. That ramps up the value-add for prospective buyers, which should lead to massive sales. Again, Apple stock appears to be sitting on a goldmine.
Unfortunately, early reports suggest it’s just that: appearances. According to Gizmodo.com contributor Adam Clark Estes, this news service is a “total mess.”
First, Estes complained that not everything worked as advertised. The value-add for the family plan apparently didn’t pan out. While a relatively small detail, nothing ticks off consumers more than marketing an attribute that doesn’t work or exist. From a PR perspective, that’s bad news for AAPL stock.
Another sticking point for Estes is the interface process. In his opinion, utilizing the service is a clumsy affair and borderline unprofessional. Looking for specific articles is a time-consuming endeavor. Backstories only go back about a year, which almost contradicts the term. Some stories are formatted as PDF files, but without optimization for iPhone screens. And you don’t get full access to a specific magazine or journal’s digital portfolio.
Some consumers might feel cheated from this soft bait-and-switch tactic. Logically, this does nothing to help the perception of AAPL stock.
Twitter Provides a Clear Contrast to Apple Stock
On the other hand, Twitter is not only a relevant news source and influential social media platform, but also a very financially healthy company. Given where key performance metrics are, it should have no problem continuing to outperform the broader indices by delivering sustained double-digit growth.
TWTR stock has had some lumpy performances this year. On the positive end, that includes a big gap up after a strong first quarter. Since then though, shares have sold off despite key fundamentals holding true.
A new prototype is underway, ad revenue is up considerably both domestically and internationally, and content partnerships are growing. Particularly, it’s worth mentioning that Twitter announced a live-streaming partnership that provides fans with the ability to watch the second half of 20 NBA games through a unique, single-player view.
This is all to say that big things are ahead for TWTR stock. And when it comes to disrupting digital media, you don’t have the same confidence with AAPL stock.
Twitter Is Becoming a News Center
Apple may have rolled out its own news service in Apple News+, but reviews have been mixed. This indicates that merely having a large installed base isn’t enough to get people to use your service. It takes more than putting some magazine content in a sleek format to get people to buy in.
In contrast, Twitter is becoming a news center in its own right. Let’s be clear that this isn’t Pulitzer Prize winning journalism. But the brevity of the format and the real-time quality of the information coming from around the globe is a powerful way to get the highlights.
As Twitter tinkers with a prototype app that makes the experience more conversational, it makes sense that more people, especially the younger generation, will gravitate toward this interactive news format.
Though Twitter doesn’t market themselves as being in the news business, there’s definitely room to become something even bigger. Already today, tweets have the power to move markets. We have seen analysts keep a sharp eye on President Donald Trump’s feed as news on trade talks has caused significant intraday swings.
In summary, Twitter has the potential to become a much bigger force in media in the coming years. Better yet, TWTR stock is currently priced fairly.
As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities.