Apple Inc. (NASDAQ: AAPL), which struggled with investors earlier this year, posted an impressive share price increase after it launched the new iPhone 11 and Apple TV+. The rally last week pushed its stock to $218.82, which is up 38.7% this year. That is better than any other of the 30 Dow Jones industrial average components. The Dow is up 14.97% for the same period to 26,820.25.

The new product launches were indeed the tonic the stock needed. It had sold down sharply in mid-summer after Apple announced earnings. The mainstay of revenue, the iPhone, continued to weaken as the iPhone X series did poorly, particularly in the world’s largest wireless market, China. The trade war better China and the United States also dragged on the stock, as anxiety about Apple supply chain interruptions grew. Apple sources many parts of the iPhone from companies in China.

Apple’s management argued that its Services business would replace the iPhone as the company’s growth engine. It is not an easy argument to make. Services revenue in Apple’s most recently reported quarter was $11.5 billion, out of a companywide total of $53.8 billion. iPhone sales totaled $26 billion.

The launch of Apple TV+ is critical to the new strategy. Apple already has a huge music store. Its app store is by far the largest in the industry. By some estimates, total apps downloaded since the store started are more than 130 billion. Many experts believe that app sales cannot continue to grow at rates they have over the past decade.

All this means that Apple’s bet on TV is absolutely critical. At $4.99 for the first month, after a seven-day free trial, it is aggressively priced compared to industry leaders Amazon and Netflix, which have price points of $12.99 a month. Apple’s management has gambled that, although its library of content is limited compared to the leaders, the low price, the Apple brand and the hundreds of millions of iPhones, iPads and Macs in the world are large enough base to which it can market its streaming service.

A significant number of investors have bought into Apple’s new iPhone and services plan. Its market cap is back near the $1 trillion level. When it announces earnings in the coming weeks, that likely will be the catalyst to keep Apple’s share growth rate well ahead of the Dow’s — or to drag it back down.

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