The report was unable to dodge broad-based bearishness towards tech names. On April 20, the company’s shares dipped by a much tamer 0.1%.

Is the earnings developments of Netflix going to have a negative impact on Apple’s future financial results? The Apple Maven is looking at the question from a number of different angles.

Is this bad news for Apple stock?

I was Binged.

Apple stock: investors should know this ahead of earnings.

There are streaming services in the penalty box.

The bad news for Apple is that the drop in subscriber count in Q1 is probably reflective of weakness in the industry.

The company lost 200,000 subscribers in the first quarter, the first negative net addition in a decade. All of the key reasons could have an impact on streamers.

There are also the post-pandemic effects. Consumers are ready to leave the house and spend money in offline experiences after several months of confinement at home, which helped to propel demand for video streaming services.

The end of a lock down doesn’t tell the whole story. The post-COVID narrative masked underlying issues that are coming to light.

The addressable market of households with broadband has been slow to adopt on-demand entertainment, according to the company. High data costs and the adoption of connected TVs were some of the challenges listed.

Competition has increased over the past couple of years. Every major media company has at least one streaming service. For example, Disney’s Get Walt Disney Company Report has Disney+, while Paramount Global offers Paramount+ and its more obscure service, Pluto TV, only to name a few newcomers.

The loss of subscribers was due to macroeconomic issues. White-hot inflation, rising interest rates, and the conflict in Eastern Europe have triggered talks of an upcoming recession.

Not everything is bad for Apple.

If accurate, this could be a problem for Apple and its Apple TV+ streaming service. I don’t believe that AAPL investors should worry too much.

Apple TV+ probably represents a small portion of the company’s revenues. I estimate Apple TV+ to account for 1% of total revenues, even though Apple doesn’t offer data on sales and profits per service.

It is not to say that Apple TV+ is not important. It’s more likely that a pure-play company like Netflix will be hurt by a softer demand for streaming services than it is that Apple will be.

One important question is how much of the recent troubles can be attributed to weak demand for the company’s service vs. its competitors. Increased competition probably hurts the incumbents more than the undisputed market leader.

Apple may be taking share away from the streaming service. TV+ was the first streaming service to win an Academy Award for best picture. Following the award, Apple’s streaming offering is likely to be taken more seriously, and its current market share of 5% could climb further.

Figure 2 shows market share development.

Just watch.

Ask about it on social media.

The stock of the streaming service fell on Wednesday. How much of a problem do you think this is for Apple TV+?

This is not investment advice. The author may be long one or more stocks. The article may contain links. These partnerships don’t affect editorial content. Thanks for supporting Apple.