Market Overview

Apple's iPhone 6 Gross Margins Could Contract, Bank of America Says

Share:
Related AAPL
Samsung Introduced 10 Times The Number Of Models In 2016 Than Apple; Did It Translate To Market Share?
Intel's Market Share In Apple's iPhone 8 Could Hit 65% This Year
I Just Bought More Shares In Alphabet, And I Did It For The Dividend (Seeking Alpha)

Shares of Apple (NASDAQ: AAPL) are not participating in Friday's rally following some bearish comments from Bank of America.

Analyst Toni Sacconaghi said it is possible Apple may experience “material gross margin erosion” for iPhone 6. It is likely that the production costs and materials for iPhone 6 will be “materially higher,” specifically the potentially larger screen and expensive battery.

For a 4.7 inch screen, gross margins could contract by ~400-500bp versus the iPhone 5/5S, Sacconaghi said.

To offset gross margin contraction, Apple may need to raise the iPhone price or use trade-ins as a way to possibly lower the price of iPhone 6.

Shares of Apple are flat in Friday's trading after bumping into the critical $550 level earlier this week.

Latest Ratings for AAPL

DateFirmActionFromTo
Jan 2017BarclaysDowngradesOverweightEqual-Weight
Jan 2017OTR GlobalDowngradesNegative
Jan 2017GuggenheimInitiates Coverage OnBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: Bank of America Toni SacconaghiAnalyst Color Analyst Ratings

 

Related Articles (AAPL)

View Comments and Join the Discussion!