Market Overview

Why Apple's Bet On A $1,000 Smartphone Will Likely Pay Off

Why Apple's Bet On A $1,000 Smartphone Will Likely Pay Off
Related AAPL
5 Books That Inspired Steve Jobs, Bill Gates And Other Billionaires
Barron's Picks And Pans: 2019 Picks, Emerging Markets, Small Caps And More
GE And Apple: High-Yield Alternative Strategies For Falling Knives (Seeking Alpha)

Based on the poor performance of Apple Inc. (NASDAQ: AAPL) as of late, some investors are likely worried that the company's $1,000 iPhone X model may be too pricey. But that isn't the case, at least according to Bank of America's Wamsi Mohan. The analyst maintains a Buy rating on Apple's stock with an unchanged $180 price target based on the assumption that Apple's decision to sell a $1,000 phone "can indeed pay off."

Apple has a good reputation of being able to convince smartphone users to migrate from lower priced phones to higher priced models, Mohan argued. Specifically, between 2014 and 2016, more consumers bought phones within a higher price brand. Moreover, sales of iPhone devices in the $400 to $499 range declined between 2014 and 2016, but sales of iPhone devices in the $500 to $599 range actually increased.


Also, the overall blended iPhone average selling price rose from $629 in 2012 to $671 in 2015, the analyst added. This trend of high iPhone ASP is expected to continue growing until at least 2019 and help boost Apple's overall higher gross profit dollars.

Finally, Apple's decision to also sell cheaper iPhone 8 and 8 Plus models will help the company "capture more market share" the lower price brands.

Related Links:

Survey Suggests Higher Demand For iPhone 8 And X, But Brace For Short Lines

Pro: Here's The Best Way To Bet Against Apple

Latest Ratings for AAPL

Dec 2018DA DavidsonReiteratesBuyBuy
Dec 2018CitigroupMaintainsBuyBuy
Dec 2018Morgan StanleyMaintainsOverweightOverweight

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

Posted-In: iPhone iPhone 8Analyst Color Long Ideas Reiteration Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (AAPL)

View Comments and Join the Discussion!

Latest Ratings

View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Under Armour Bulls, Your Time May Have Come

EUR/USD: Bears Eyeing A Break Below Ascending Trend-channel Ahead Of Draghi's Testimony