Cheaper iPhone could, paradoxically, increase Apple’s margins
Credit: Ferry Passchier
While the markets may worry about the effect of cheaper products on Apple’s still-enviable margins, those concerns may be misplaced in the case of a low-cost iPhone, reports Fortune.
Not to fear, writes Morgan Stanley’s Katy Huberty in a note to clients Monday. According to her calculations, a lower-priced iPhone should — paradoxically — raise those margins.
The way she sees it, if Apple lowers the cost of owning an iPhone, more people will buy them. And because the profit margins on even a lower-cost iPhone are so much higher than the margins on Apple’s other products, the net effect will be to lift the company’s gross margin …
Expand
Expanding
Close
