AAPL: Company Update -- Marketing costs -- zero. Consumer awareness -- 100%. Content budget -- $2B. Appearances by Spielberg, Oprah, Aniston, JJ Abrams -- priceless. Apple (AAPL) competes against Netflix (NFLX) with $50B/year of FCF, 900mm captive users (minimizes customer acquisition costs), can bundle games, news, music, TV with new iPhone sales, and has the strongest Network Effects. Assuming AAPL prices its three new services (TV, games and news) at $10/month each and it gets 10% of its 900mm unique users to subscribe to each, that would add 270mm new subscriptions at $120/year each, or $32B of new revenue (nearly double 2018 Service’s total revenue) which would fund 2-3x more content than NFLX’s $13B budget, which NFLX must borrow money to fund. Finally, AAPL’s valuation rises as iPhone churn falls, and new subscription adoption lowers churn. Download the six-page report below.