Apple (NASDAQ:AAPL) is launching a video streaming service, and that’s a bad thing for Netflix (NASDAQ:NFLX).

At least that is what the market thinks, after Morgan Stanley released a note on Apple Video detailing how that service could become a legitimate Netflix competitor by 2025. Citing a big budget, a huge install base, and a plethora of partnerships, Morgan Stanley outlined a case for Apple Video to get to 50 million subscribers by 2025, about 40% the size of Netflix today.

In response to the note, Apple stock traded flat, while Netflix stock dropped.

But, will Apple Video really become that big? And, even if it does, will it kill Netflix?

Yes and no. Judging by the success of Apple Music, Apple Video does have big growth potential over the next decade. But, also judging by Spotify‘s (NYSE:SPOT) success, Apple Video’s ramp over the next decade doesn’t necessarily mean the death of Netflix.

As such, I think Apple Video’s ramp is a big tailwind for Apple stock and simply a warning sign for Netflix stock.

Apple Video Could Be Huge

In order to see how big Apple Video could be, all you need to do is look at Apple Music.

Apple Music launched in the summer of 2015. At that point in time, Spotify was the lone big player in the music streaming industry with 75 million active users and 20 million paid subscribers.

Fast forward three summers, and Apple Music has zoomed to 50 million subscribers (60% the size of Spotify). That includes more than 20 million subs in the United States, where Apple Music is bigger than Spotify.

Apple Video could easily follow in the same footsteps. Apple will leverage its massive OS ecosystem, pump a bunch of money into product and content development, and push the video service aggressively to its huge install base.

But, Apple Video won’t grow as rapidly as Apple Music for two reasons: 1) lots of competition, and 2) smaller install base.

On the first point, the video streaming market is very different from the music streaming market because of competition. Simply, the video streaming market has far more competition, and that competition is bigger, better, and faster (compare Pandora (NYSE:P) and Soundcloud to Netflix, YouTube, Hulu, AT&T (NYSE:T) and Disney (NYSE:DIS)).

On the second point, Apple Music scaled so quickly because the iPhone install base is so large. Music is a smartphone-based activity, so the bigger iPhone’s install base, the more people Apple could push its music service to. iPhone’s U.S. market share is somewhere between 35% and 45%.

But, video isn’t a smartphone-based activity. I don’t know many people who watch Netflix on their phones. Instead, video is more of a smart TV and computer-based activity. Apple’s desktop market share is much lower at less than 10%, and Apple TV’s market share is presumably even lower considering the relative infancy of that product.

Thus, Apple Video won’t scale as quickly as Apple Music. Apple Music got to 60% the size of Spotify in three years. Apple Video could maybe get to 30% the size of Netflix in five years. Assuming Netflix grows to about 200 million subs in five years, we are talking about 60 million Apple Video subs by 2023.

But It Won’t Kill Netflix

At 60 million subs paying presumably $8 per month, Apple Video could be generating revenue of nearly $6 billion in five years.

But, despite that big growth potential, Apple Video can get there without killing Netflix. The big thing here is that the over-the-top streaming market will be so large, and that the price points on these services are so small, that the market and the consumer can support multiple successful streaming services side by side.

Plus, because each service is built on original content, there is a consumer desire to have Netflix, Apple Video and Hulu all together.

Also, Spotify was able to continue on its rapid growth path even after Apple Music became a huge success. Why? Because the music streaming market is growing quickly enough to support big growth from multiple players. The same is true in the video streaming market.

As such, while Apple Video will be huge for Apple stock, it also doesn’t mean Netflix is doomed. Instead, it is just a warning sign for Netflix stock that big competition is looming.

Bottom Line on Apple Stock

Apple stock is a winner. This is a reasonably valued stock with multiple growth levers, any of which can be pulled at any time to drive super-charged growth. One of those levers is Apple Video, and it is reasonable to assume that Apple Video will be a major driver of Apple stock over the next several years.

As of this writing, Luke Lango was long AAPL, T and DIS.