Market Overview

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

Related AAPL
Apple's iCloud Attacked By Chinese Hackers; Beijing Denies Responsibility
Time For Investors To Buy The Dip?
Why Apple Proves You Don't Need a Sale to Boost Sales (Fox Business)

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
Oct 2014Cantor FitzgeraldMaintainsBuy
Oct 2014BarclaysMaintainsOverweight
Oct 2014Morgan StanleyMaintainsOverweight

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

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

 

Related Articles (AAPL)

Around the Web, We're Loving...

Get Benzinga's Newsletters