“In general, the Street reaction [to Apple’s $200 iPhone price cut] is fairly enthusiastic; the interpretation is that the company can now ramp up its share in the highly competitive handset market. But there are margin implications from cutting the price by a third, offsetting the expected volume gains. In the end, most analysts simply left their estimates in place,” Eric Savitz blogs for Barron’s.
Savitz provides a quick run down on this morning’s thoughts on Apple’s news from the Street. Some exceprts:
• Ben Reitzes, UBS: Called iPhone price cut “a stunner.” Says, “while investor reaction to the iPhone price cut could be negative near-term, we believe unit demand will be stimulated and the jury is still out.”
• Bill Shope, J.P. Morgan: Encouraged that investor expectations for the device are set to become more realistic and that the lower price point can stimulate units this holiday season.
• Chris Whitmore, Deutsche Bank: Expects lower iPhone price point to drive incremental demand; says Apple is “likely willing to concede lower near-term hardware margin in order to capture a recurring, monthly annuity from AT&T.” He says “the net financial impact” should be “additive.
• Gene Munster, Piper Jaffray: Price cut is a “surprise,” but should accelerate adoption.
• Andy Hargreaves, Pacific Crest: Asserts that “the price decline will prompt increased unit volume.”
• Kathryn Huberty, Morgan Stanley: Views price cut at “a positive move to stimulate holiday demand in a high volume, high margin segment of the business,” and says the cut “could generate meaningful incremental unit demand.”
Much more, including comments relating to the new iPod lines, Mac sales, and more here.
[Thanks to MacDailyNews Reader “Joe Architect” for the heads up.]