Morgan Stanley is backing Apple TV+ to be a success. In a note published Tuesday, an analyst at the bank said it will be a $9 billion a year business with 136 million paid subscribers by 2025 (via CNBC).

Apple TV+ Has Attractive Price Point And Wide Distribution

Analyst Katy Huberty noted the competitive price point of the surface. She also took Apple’s decision to give a year’s free subscription with the purchase of a number of products into consideration. In the note she said:

With an attractive price point at $4.99/month, and wide initial distribution to the Apple installed base via the bundled free year offer, we estimate Apple TV+ can become a $9B revenue business with 136M paid subscribers by FY25, assuming just 1 in every 10 Apple user pays for the Service by FY25.

“For Apple TV+ to have a more material impact to our near term estimates, we’d have to assume 1) Apple TV+ production costs are significantly higher at the launch of the Service, and/or 2) more users redeem the Apple 12 month free offer with the purchase of a device,” Ms. Huberty added. Overall, predicted that Apple’s services business will grow by 20 percent next year.

Elsewhere, she predicted that iPhone sales will return “to growth as replacement cycles peak.” Consequently, she raised the target price of Apple stock by 17 percent, from $247 to $289.