Apple Inc. (NASDAQ:AAPL) recently debuted a flurry of new services at a big launch event, including Apple News+, Apple Card, Apple TV and Apple TV+. The event, though, was light on details, and of the four new products, only one is immediately available (News+). Wall Street was unimpressed. Analysts walked away with a largely mixed response, and Apple stock has traded down since the event.

In the near term, this reaction in Apple stock makes sense. Three of the four new services won’t be available until several months down the road, and the one immediately available likely won’t move the needle for Apple’s profits anytime soon. As such, from a near-term upside standpoint, Apple’s event was a disappointment.

Consequently, Apple stock reacting negatively in the near term makes sense.

But, in the big picture, the negative reaction in Apple stock is just noise in an otherwise healthy long-term growth narrative. Sure, Apple’s Services event was light on details, and was all about “what will be tomorrow,” rather than “what is today” … but it also underscored that the future for Apple is still quite bright — even in a world nearing smartphone saturation — mostly thanks to Apple’s unique and unprecedented ability to offer multiple subscription services to nearly 1 billion iPhone users around the world.

Consequently, long-term investors shouldn’t be worried too much about the weakness in AAPL stock following the company’s big event. The stock had come very far, very fast, and it was subject to a pullback. The Services event didn’t check off all the near term boxes. AAPL stock dropped. But, the event did check off all the right long term boxes. So, AAPL stock will rebound from here.

Overall, Apple stock looks as good as ever. It is becoming increasingly clear that Apple doesn’t need smartphone unit growth to power a bright future, and as that narrative gains traction over the next several years, Apple stock will head higher.

The Event Missed Near Term Expectations

Broadly speaking, Wall Street expected more out of Apple’s big event. Specifically, analysts and investors wanted more details and tangible information with respect to Apple’s Services road-map, and wanted new products to launch soon. Why? Because they wanted to point to reasons why Apple will top estimates over the next several quarters, and use that as rationale for upside potential in Apple stock in the near future.

That didn’t happen. Instead, while four new services were announced, only one of those services is expected to launch within the next several months. That one service, News+, is a $9.99/month magazine aggregation subscription service that will likely attract no more than a million subs in the first several months. At most, then, we are talking about a $120 million annualized revenue opportunity from News+ within the next several months. Apple is expected to report revenues in excess of $250 billion this year. Thus, $120 million is an insignificant drop in the ocean.

Meanwhile, the elephant in the room, Apple TV+, remained elusive. No price point was given. No specific launch date was given. Some original shows were announced, but not enough to warrant building a streaming service around, and certainly not enough to compete with Netflix (NASDAQ:NFLX) or

Amazon (NASDAQ:AMZN). Details were likewise light on Apple TV and Apple Card.

All in all, investors actually left the event with more questions than answers. That’s not a good thing, and that’s why Apple stock dropped in response. But, there was a silver lining: investors received a positive answer to the question that has plagued AAPL stock over the past several months …

The Long-Term Growth Narrative

Over the past several months, it has become increasingly clear that peak smartphone is here. Everyone who wants a smartphone, already has one. Thus, the reality has sunk in that iPhone unit growth will be largely null going forward. This reality has weighed on shares of Apple, the tech giant that historically gets about half of its revenue from the iPhone.

Going forward, then, the biggest question regarding Apple stock is as follows: Will this company be able to grow without iPhone unit growth? The answer is yes.

Here’s the big picture. Apple has spent the last ten-plus years trying to create a smart device ecosystem that is second to none in the world. Through persistent innovation, the company did just that. Today, the iPhone install base numbers nearly 1 billion users. Over the next ten-plus years, Apple will try to optimally monetize that 1 billion user smart device ecosystem using various subscription services. Through persistent innovation, the company will do just, and Apple’s Services business go from afterthought to the main event.

Apple’s Services event confirmed that this transition is well underway. First, it was the App Store. Then, it was Apple Music. Now, it’s Apple News+. Next, it’s Apple TV+. After that, it will be cloud gaming. Et cetera. Et cetera.

It doesn’t particularly matter when these things launch. All that matters is that they are launching. It’s a sign of the times. Apple is creating subscription software services, which are of high quality because of Apple’s resources and brand equity, and is able to drop those subscription services into one billion pockets worldwide, so advertising is free and adoption is rapid.

In other words, it is now as clear as ever. Apple’s future is bright, even without iPhone unit growth, because the company is successfully executing on a tremendous opportunity to monetize the world’s largest smart device ecosystem. As the company continues to execute on this opportunity over the next several years, Apple stock will head higher.

Bottom Line on AAPL Stock

There were a lot of questions surrounding Apple stock when iPhone unit growth started to fall flat in late 2018. Those questions are now fading, as Apple is continuing to execute on a Services growth strategy that, if done correctly, could easily keep Apple’s revenues and profits on a healthy uptrend for the foreseeable future.

Consequently, so long as Apple continues to execute on its Services road-map, AAPL stock should head higher.

As of this writing, Luke Lango was long AAPL, NFLX and AMZN.