“A rise in margins has raised hopes that Apple Inc may be able to hold the line on pricing ahead of the launch of new iPhones later this year,” Supantha Mukherjee reports for Reuters. “Apple’s shares rose 3.3 percent to a 22-month high of $97.88 on the Nasdaq on Wednesday.”
“At least six brokerages raised their price targets on the stock by as much as $12 to a high of $123,” Mukherjee reports. “Apple’s gross margin rose to 39.4 percent in the third quarter from 36.9 percent a year earlier, and the company forecast current-quarter margins of 37-38 percent.”
“‘With (gross margins) stabilizing (year-on-year) and core demand trends solid, we think investors will want to own Apple stock (going) into bigger-screen iPhone 6 and ecosystem-expanding iWatch/iBand launches,’ Evercore Group analysts wrote in a note,” Mukherjee reports. “Analysts expect a staggered launch of new iPhones, with a 4.7-inch flagship launching late September, followed by a 5.5-inch phablet around November. ‘We believe that a larger screen iPhone, combined with Apple’s strength in software and ecosystem, will be well received in the market and will drive unit growth,’ BMO Capital Markets analysts wrote in a note.”
Read more in the full article here.
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With margins almost back to record high’s and the copycats of the Android world not having anything to copy but to wait for Tim Cook/Apple to “unleash” their “mojo” unto the world, I think this would be a good time to say “let the games begin!” Go Apple and Go Tim Cook!! We support you guys.
As customers purchase higher capacity iDevices, the margins increase exponentially. Also, Apple doesn’t give stuff away in BOGO-like deals.
“As customers purchase higher capacity iDevices, the margins increase exponentially.”
Either you are applying a very small base for your exponent or you don’t understand what “increase exponentially” really means. In fact, one could argue that margins *decrease* as the person bumps up their storage purchases as the *size* of storage increases exponentially (by a power of approximately two) while the price increases linearly (by a fixed $100 per exponential increase in space).
Indeed, one could actually say that the *cost* increases *logarithmically* with respect to size — almost the exact opposite of what you are claiming. Granted, you’re talking about margins, not cost, but there isn’t sufficient evidence to suggest that Apple’s margins are differing greatly from their costs for these devices.
It’s fun to use hyperbolic terms like “exponential” but try and keep your enthusiasm grounded in reality. There are lots of great reasons to brag about Apple’s financial acumen; no need to go overboard.
I’m speaking in terms of per device. If, for example, a person purchases a 64GB model rather than a 16GB model. There’s no way Apple pays anywhere near $200 for the additional 48GB of flash?
I don’t think I’m going anywhere near overboard when I use the term “exponentially”. Go find some other fool to fuck with.
You are totally going overboard, because you are using the term completely incorrectly.
I can’t remember hearing anything about a iPhone 6 with a 4″ screen.
The main problem is with jackass analysts who look at Apple every quarter, see some negative change and start yelling, “The sky is falling for Apple.” The quarter for quarter appraisal of Apple is completely stupid. Does any company actually run like some clock? I’d think a company like Apple with somewhat seasonal sales could have a dismal quarter and still have a spectacular year. It would be difficult for Apple to time product releases for every quarter to bolster quarterly sales and it would be stupid to even try just to please Wall Street.
I’d always thought analyst price targets were supposed to hold for an entire year and not constantly flip-flopping for each quarter. The way Apple is valued is being done entirely wrong. Who came up with quarterly assessments anyway? They’d only work well for certain types of companies. Apple could easily get by with six month assessments for shareholders.