Dow Jones slips as Disney Stock skyrockets, Apple plans internal modem
the Dow Jones Industrial Average (DJINDICES: ^ DJI) was down around 0.13% as of 11:05 am EST on Friday, but it outperformed the other major indices thanks to Disney (NYSE: DIS). The entertainment conglomerate nearly tripled its four-year outlook for Disney + subscribers at its Investor Day event, news that pushed the title up by more than 10%.
Actions of Apple (NASDAQ: AAPL) were not so lucky, collapsing a bit after the company reportedly started working on an internal modem chip. This will allow Apple to reduce its reliance on chipmakers for its devices, but it was news that was bound to come sooner or later.
Disney is not kidding
The Disney + streaming service has been incredibly successful, with over 86 million subscribers just over a year after its launch. The company was originally targeting 60 to 90 million subscribers by 2024.
The pandemic increased the popularity of streaming services as people spent more time at home, and shutting down theaters forced Disney to adopt a streaming-centric strategy. Disney now expects to attract many more subscribers: The company raised its outlook for Disney + subscribers to a range of 230 million to 260 million by 2024 on Thursday’s Investor Day. By including Hulu and ESPN +, the company aims to reach between 300 million and 350 million subscribers.
Disney is also raising prices to reflect the increase in content spending. Disney + US prices will drop to $ 7.99 per month in March 2021, from $ 6.99 per month currently. The company now plans to shell out between $ 8 billion and $ 9 billion in content for Disney + in 2024, up from a previous forecast of around $ 4 billion. Across all of its direct-to-consumer sales activity, Disney projects 2024 content spending of between $ 14 billion and $ 16 billion.
A major advantage enjoyed by the streaming leader Netflix is the willingness and ability to spend obscene amounts of money each year on content. Disney plans to join this club as it ramps up its streaming business over the next four years.
Disney shares rose 12.5% on Friday morning as investors celebrated the company’s much higher subscriber outlook. Disney shares are now up around 20% year-to-date.
Apple is working on an internal cellular modem
Bloomberg reported Thursday night that tech giant Apple had started working on a cellular modem for future devices. The news came from Apple’s senior vice president of hardware technologies Johny Srouji during a public meeting with Apple employees, according to Bloomberg sources.
Apple has long designed its own processors for its iPhone and iPad devices, and it recently launched the first Mac computers powered by internal silicon. The company also designs other chips for its devices, including camera processors and artificial intelligence accelerators. The decision to design its own modems as well will further reduce Apple’s reliance on third-party chipmakers.
“Long-term strategic investments like these are essential to activate our products and ensure that we have a rich pipeline of innovative technologies for our future,” Srouji reportedly said of the modem project at the meeting of the town hall.
While the timing for Apple using its own modem chips is unclear, it will be a significant loss for Qualcomm (NASDAQ: QCOM). Qualcomm provides 5G modems for the iPhone 12 family, launched earlier this year. Qualcomm shares fell about 5.6% on Friday morning in reaction to the news.
Apple’s decision to design its own modem should come as no surprise: the company paid $ 1 billion for most of the Intelligencemodem activity last year. Intel retained the right to develop modems for non-smartphone applications as part of the agreement.
Apple shares were down 1.5% on Friday morning despite news from the modem. The stock is still up around 65% so far this year.
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