“Apple’s itsy-bitsy iPad mini is past its prime, having gone from ripe to rotten in the sales department at the hands of an unlikely source: the company’s own iPhone 6 Plus,” Jenn Van Grove reports for TheStreet.
“The super-sized smartphone will cannibalize sales from the compact tablet in 2015, as Apple customers opt for a ‘one-device-fits-all proposition,’ Trefis analysts wrote in a Friday note on the Cupertino, Calif.-based company,” Van Grove reports. “But Apple will still come out on top. ‘The thicker margins on the new iPhone 6 Plus models should more than make up for potentially lost sales of the iPad Mini,’ Trefis concluded.”
“The larger iPhones won’t help Apple’s iPad problem, but they should give Wall Street something better to fixate on. Trefis holds a $120 price target for Apple, representing around a 10% premium over the current share price. Shares of Apple closed down nearly 1% at $109.33 on the first trading day of the new year. ‘We believe the most popular version of the iPhone 6 Plus is likely to be the 64 GB version, which retails at $849 off contract,’ Trefis analysts wrote in the research note,” Van Grove reports. “At that price, Trefis estimates that Apple makes a gross profit of more than $600 per phone. Margins on the iPad mini, meanwhile, are likely closer to $100 per tablet, according to Trefis.”
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