Apple Inc.’s streaming-video service has gained limited traction with consumers, and this could represent a cautious signal as the company moves away from hardware sales and toward services, according to Bernstein.

Analyst Toni Sacconaghi estimated that fewer than 10 million consumers had opted for their free 12-month trial of Apple TV+, citing an analysis of the company’s first-quarter results. This equates to 10% or fewer of eligible customers, he wrote, a take rate he called “surprisingly low.” Apple hasn’t disclosed subscriber numbers for the TV+ service.

Sacconaghi speculated that Apple TV+ may be “failing to resonate with customers, perhaps due to its limited content offerings.” Unlike other streaming services such as Netflix Inc. or Amazon Prime, which offer reruns to well-known content, Apple only offers original shows on its service, with “The Morning Show” being the most high profile. Meanwhile, Walt Disney’s Disney+ service has benefited from the company’s pool of well-known intellectual property, like “Star Wars” and Marvel.

In December, an expert panel hosted by UBS said that Apple TV+ “needs a mega-hit original series to ultimately retain subscribers,” adding that the company “may likely have to ultimately also acquire an asset with a big backlog of catalog content -- most of which will be very expensive at this point.”

Bernstein suggested other reasons why Apple TV+ may not have caught on in terms of subscribers. It could be that Apple “hasn’t been able to effectively promote TV+,” Sacconaghi wrote, encouraging the company “to more directly leverage its 1.5B device installed base.” He also reflected that the company may be conservatively estimating the take rate or “deliberately scaling its promotions of TV+ slowly to mitigate the negative accounting impact.”

In any case, he added, investors should “closely monitor the adoption of TV+ going forward,” as the take rate will “provide some indication of potential acceptance of the service, as well as Apple’s ability to successfully launch meaningful new revenue-generating services.”

Bernstein has a market-perform rating and $300 price target on the stock. Sacconaghi wrote that he was “torn” about its prospects, as the valuation is “off the charts vs. history, with increasingly high expectations.”

Shares of Apple are up nearly 80% from a June low, although it has recently dropped on concerns over the coronavirus outbreak in China.

Apple’s services business grew less than expected in the first-quarter results, in a performance that was seen as disappointing. While the magnitude of the miss was “slight,” Credit Suisse analyst Matthew Cabral wrote, the business is “key to the [long-term] bull thesis and is often cited as a driver of multiple expansion.”

The services business generated more than $46 billion in revenue over 2019, according to data compiled by Bloomberg; this represents nearly 18% of overall revenue. Despite uncertainty related to the TV+ business and the overall pace of growth at the division, analysts still see rapid growth for services revenue. Last month, Evercore ISI wrote that it was “an underappreciated growth lever,” and that services revenue could grow above $100 billion by the end of Apple’s 2024 fiscal year.

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