FBR Capital Says Music Streaming Only 'Tip Of The Iceberg' For Apple

Apple Inc. (NASDAQ: AAPL) has decided to reverse its decision of not playing artists royalties for the three-month trial period of Apple Music after singer Taylor Swift announced on Sunday that she won't allow the tech major to stream songs from her album '1989' for free.

Daniel Ives from FBR Capital Markets was on CNBC Monday to weigh in on this.

Demonstrates Flexibility

"Look, I continue to view this (streaming service) as sort of a work in progress," Ives said. "They are going to be flexible; they need this to be successful on streaming – not just in the music where they go head to head with Spotify. And I think this shows the flexibility, how Apple is doing this."

Ives continued, "And just how important these next three months are to get users on to the platform, especially [...] this is the tip of the iceberg the streaming service for Apple. It's music today. Eventually six to nine months, we think, it's streaming TV."

Related Link: Are Apple And Goldman Sachs A Startup's Worst Nightmare?

Green Path In Near Term

Ives was asked for his outlook on Apple. He replied, "The main indicator for Apple, it's about upside in iPhone. We still think we have three, four quarters of upside here. China is the high-octane fuel in the engine. Ultimately, we put that together, and that's going to drive the stock higher from here. But, this is really more about that next step in terms of streaming, in terms of Apple Watch, where Cook knows it has to fill [...] growth areas for 2016, 2017.

"Near term, we see very green paths for Apple on this iPhone growth, as well as China. I mean, that's really the fuel in the Apple growth story," Ives concluded.

Image Credit: Public Domain