Analysts have been expecting this fall’s iPhone 8 to prompt a so-called ‘super cycle’ for weeks, and now Credit Suisse is the latest to push that expectation. Analyst Kulbinder Garcha at the firm cites ‘pent up demand’ from the iPhone installed base for a very different model than recent hardware updates.
Apple’s stock is currently trading for around $141 with Credit Suisse previously projecting a target price of $160. Now the firm is increasing its target price for AAPL up to $170 according to MarketWatch.
A Credit Suisse survey of iPhone 6/Plus owners found that 18% of them would ‘definitely’ buy an Apple Watch, with a further 11% saying they would probably buy the upcoming smartwatch, reports Business Insider.
A general rule of thumb when interpreting purchase intention claims is to count only those who say they will ‘definitely’ buy (some of them won’t, but that’s balanced out by the fact that some of the ‘probably’ and ‘maybe’ categories will). That would suggest around 35M sales in the first year …
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Morgan Stanley’s Katy Huberty has added AAPL to its Best Ideas list of investments, saying that increased margins from iPhone 6 sales see the stock “set for significant upside.”
While Credit Suisse had earlier suggested that margins on the iPhone 6 would be lower than that of the iPhone 5s and 5c, Huberty says that numerous sources are suggesting that more people this time are opting for the middle storage tier, thus pushing up both average selling price and margins …
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Credit Suisse analysts have estimated that Apple is making a smaller margin on the iPhone 6 than on any previous model – but predicts that the impact will be offset by year-on-year revenue growth of 14 percent, reports Quartz.
The iPhone 6 costs Apple $350.60 to produce, all in. Apple typically receives $599 on the retail price of $649, leaving it with $248.40 in gross profit. That’s 41.5%. Still very healthy, but not at the levels of previous models.
In contrast, the iPhone 5s left Apple with $274.30, giving it a 45.8% margin. The two-year-old iPhone 5 gave Apple $293.70 per unit, or 49% …
The consensus view of 40 analysts polled by Fortune is that Apple’s year-on-year revenue for its fiscal Q2 (Q1 of the calendar year) has fallen by 0.2 percent to $43.6B. This follows earlier predictions that iPhone sales will have grown two percent, and iPad sales will have dropped by 0.7 percent.
Most of our analysts (31 out to 40) are playing it safe, offering estimates within the range of Apple’s guidance — between $42 billion and $44 billion.
Seven think Apple will beat its revenue guidance — by half to three-quarters of a billion dollars, according to Merrill Lynch’s Scott Craig and the Braeburn Group’s Patrick Smellie, respectively. Two analysts — Credit Suisse’s Kulbinder Garcha and the Braeburn Group’s Sunil Shah — think Apple’s revenue may actually have fallen year over year …
