After Meeting With Apple CFO, Analyst Believes Lower-Cost iPhone Makes Good Sense
Following recent meetings with Apple Chief Financial Officer Peter Oppenheimer, Morgan Stanley analyst Katy Huberty today issued a research note sharing some of her takeaways from those discussions and her views on Apple's future plans.
While she did not disclose any specific information shared by Oppenheimer, Huberty did come away feeling that Apple will be working hard to expand carrier partnerships and distribution for the iPhone to drive growth in Apple's largest segment. She also believes that Apple is working to develop new services to take advantage of the "stickiness" of the Apple ecosystem.
On the topic of the lower-cost iPhone which has been the subject of increasing rumors, Huberty makes the case Apple's experience with the iPad mini and continued strong sales of the iPhone 4 that saw the company experiencing shortages throughout the fourth quarter of 2012 are driving the company's efforts to focus more on cheaper offerings.
We also see several signs that a lower priced iPhone makes sense: 1) iPad Mini is expanding Apple's customer base with 50% of purchases in China/Brazil representing new customers to the ecosystem. 2) Chinese consumers show a desire to purchase the latest version of iPhone (instead of discounted older generations). 3) iPhone 4 demand surprised to the upside in the December quarter. Even at a low 40% gross margin and 1/3 cannibalization rate, we see an "iPhone Mini" as incremental to revenue and gross profit dollars.
Huberty goes on to note that she believes Apple has maintained its long-standing approach to product decisions under the leadership of Tim Cook and that the company remains committed to innovation with a strong product pipeline under development. Despite continued investments in that pipeline, Huberty believes that Apple is likely to return more cash to shareholders as its cash holdings continue to grow.
Popular Stories
Apple released iOS 16.3 in late January following nearly six weeks of beta testing. The software update is available for the iPhone 8 and newer, and while it is a relatively minor update, it still includes a handful of new features, changes, and bug fixes.
Below, we've recapped new features in iOS 16.3, including support for physical security keys as a two-factor authentication option for...
Online retailer TigerDirect has slashed pricing on the M1 iPad Air in several colors, offering the base 64GB configuration for just $313.99 in Purple and Pink.
Note: MacRumors is an affiliate partner with TigerDirect. When you click a link and make a purchase, we may receive a small payment, which helps us keep the site running.
That's a savings of 48% compared to Apple's normal $599.00...
Apple's next device with an Apple silicon chip may not be a Mac or an iPad, but rather an advanced external display, according to recent reports.
The display, which is rumored to arrive this year, is expected to sit somewhere between the $1,599 Studio Display and the $4,999 Pro Display XDR – but more exact information about the device's positioning and price point is as yet unknown. While ...
Apple has discussed selling a new top-of-the-line iPhone alongside the Pro and Pro Max models in 2024 at the earliest, according to Bloomberg's Mark Gurman. Based on this timeframe, the device would be part of the iPhone 16 lineup or later.
In a September 2022 edition of his weekly "Power On" newsletter, Gurman said there was "potential" for an iPhone 15 Ultra to replace the iPhone 15 Pro...
Apple's VP of hardware engineering Matthew Costello and product marketing employee Alice Chan recently spoke with Men's Journal and TechCrunch about the new second-generation HomePod in wide-ranging interviews about the smart speaker.
Apple discontinued the original full-size HomePod in March 2021 after multiple reports indicated that sales of the speaker were lackluster, but Chan told Men's ...
Google's Chromium developers are working on an experimental web browser for iOS that would break Apple's browser engine restrictions, The Register reports.
The experimental browser, which is being actively pursued by developers, uses Google's Blink engine. Yet if Google attempted to release it on the App Store, it would not pass Apple's App Review process.
Apple's App Store rules dictate...
Apple appears to be preparing an iOS 16.3.1 update for the iPhone, based on evidence of the software in our website's analytics logs this week. It's unclear when the update will be released, but it will likely be available at some point in February.
The same logs have accurately foreshadowed the release of several previous updates, including iOS 16.0.3 and iOS 16.1.1 most recently, so they...
Today is the official launch day for the second-generation HomePod that was introduced in January, and we picked one up to compare it to the original HomePod that Apple discontinued in 2021.
Subscribe to the MacRumors YouTube channel for more videos. Design wise, the second-generation HomePod looks a lot like the first-generation model, featuring the same rounded design and acoustic mesh...
Top Rated Comments
This.
I never understood americans view un subsidised phones?? It seems you think you are getting the phones for free, you even refer to the subsidised price when you talk about how much the phones cost. Do you know that you are actually paying more for the phone than they would cost paying full price right away? ...but the price is baked into the subscription...and the more money you pay to your carrier, the less you will have to pay for the phone.
We have these offers in Europe too, and most people use them, but at least we know it´s not a free phone.
If :apple: is gonna grow more, they have to address & expand fringes. Higher cost devices is a exponentially-decreasing category. That leaves cheaper ... so of course lower-cost iPhones make sense. Make 'em more akin to iPod Nanos with phone capability.
Stickiness works. I bought an iPod Shuffle, and now I've got 4 iDevices in front of me, 4 more at home, and write iOS apps for a living. I have been assimilated. Resistance is futile.
ROFLMAO! Yea, those carriers are gouging while poor Apple's cash pile is only $137 billion. Thank goodness Apple sells their products for a minimal profit to help out the poor consumer.