5 Apple Analysts On HomePod Mini, Pricing Of 'Premier 5G' iPhone

Apple unveiled its new smart speaker and four new iPhone12 models at the “Hi, Speed” Apple Event Tuesday, and analysts are out with updates based on the new phones and smart speaker.

Analysts on iPhone Estimates: BofA Securities analyst Wamsi Mohan projects that Apple Inc. AAPL will sell 38 million and 77 million iPhones in the September and December quarters, respectively. That's an increase from BofA's prior estimate of 34 million and 75 million.

The analyst expects some demand to carry into the March quarter, which he said could be a negative for the December quarter.

Morgan Stanley analyst Katy Huberty said the 5G launch “revs the growth engine."

The replacement cycle has been stretched due to store closures during the pandemic, the analyst said. 

Apple will sell 220 million iPhones in fiscal year 2021, which is 4% above consensus estimates, in Morgan Stanley's view.

Huberty raised the price target from $130 to $136 based on the event. A bull case of 240 million iPhones sold in FY2021 could help Apple get to Huberty’s bull case price target of $171, she said.

Raymond James analyst Chris Caso projects that Apple will sell 202 million iPhones in fiscal 2021.

Related Link: Apple’s 5G iPhone Line Sees Mixed Response In China: Survey

Analysts On iPhone Pricing: Mohan expects the average sale prices for Apple to move lower, with no increase on the iPhone12 Pro models.

“We leave our gross margins unchanged given the ASP increase at the low end," the BofA analyst said.

RayJay's Caso highlights the fact that Apple now has the price points of $399 to $1,399 covered with its iPhone models.

“What’s notable with regard to pricing is that Apple now has all price points covered, yet the price structure includes several incentives for customers to move to higher price points,” he said.

The smaller price gap between models makes it easier to upsell to the more expensive iPhone12 Pro models, Caso said.

Piper Sandler analyst Harsh Kumar called pricing “the killer app for the phone launch.”

“We continue to believe the iPhone will be the [premier] 5G smartphone over the next several years.”

Needham On HomePod Mini: Needham analyst Laura Martin centered the discussion on the HomePod Mini.

The HomePod Mini encourages all family members to join iOS, which could help Apple’s future acquisition costs, the analyst said.

Most Apple services have family plan discounts, which makes it hard to leave the Apple ecosystem, as it would result in higher costs elsewhere.

Apple can gain share in the smart speaker market, where Amazon.com AMZN and Alphabet Inc GOOG GOOGL have sold 10 times and five times more devices than Apple, respectively, Martin said.

The integration of the iPhone with HomePod Mini is a competitive advantage Amazon and Google cannot match, the analyst said.

AAPL Price Action: Apple shares were down 0.26% at $120.78 at last check Wednesday. 

Photo courtesy of Apple.