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Apple Negotiates $100 iPhone 6 Price Increase, According to Jefferies

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In a report published Monday, Jefferies analyst Peter Misek noted that Apple (NASDAQ: AAPL) is negotiating a $100 iPhone 6 price increase with carriers.

Misek commented that although the initial response has been no, the company may get some increase split between the consumer and carrier.

The analyst wrote, “The possibility may at first seem farfetched in light of investor concerns regarding possible carrier subsidy and handset price cuts due to smartphone saturation and lack of differentiation. But we think this general lack of differentiation could be the reason why Apple may be able to get a price increase. Carriers realize that the iPhone 6 will likely be the only headline-worthy high-end phone launched this year and that they will lose subs if they do not offer it.”

Jefferies reported that a $50.00 ASP increase will assist in offsetting much of the negative iPhone 6 GM impact. The analyst's preliminary iPhone 6 BOM estimates indicates that GM could be 450bp lower than the 5s. Misek assumes a 430bp decline in current estimates and remarked the $50.00 increase would raise GM by 375 bp and “would offset most of the iPhone 6 COGS pressure.”

Shares of Apple closed at $519.61 on Friday.

Latest Ratings for AAPL

DateFirmActionFromTo
Sep 2014Pacific Crest SecuritiesDowngradesOutperformSector Perform
Sep 2014Goldman SachsMaintainsBuy
Sep 2014Mizuho SecuritiesMaintainsBuy

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Posted-In: Jefferies Peter MisekAnalyst Color News Retail Sales Analyst Ratings

 

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