According to Morgan Stanley analyst Katy Huberty’s note to clients Monday, “a lower-priced iPhone should — paradoxically — raise [Apple’s] margins.,” Philip Elmer-DeWitt reports for Fortune.
“The way she sees it, if Apple lowers the cost of owning an iPhone, more people will buy them,” P.E.D. reports. “And because the profit margins on even a lower-cost iPhone are so much higher than the margins on Apple’s other products, the net effect will be to lift the company’s gross margin.”
P.E.D. reports, “Profit margins for the current quarter could show a similar effect, she writes, as Apple experiments with lower regional price points on the old iPhone 4.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]