Analyst: Cheaper iPhone Will Heal the Stock

Measurable Impact on Results

According to Munster, Apple has seen a “measurable impact” on its results over the years from introducing cheaper product introductions and that the lower-priced iPhone could be “slightly dilutive” to his 41.5 percent gross margin target for Apple for 2014.

Start 2013 better than ever by saving time and making money with your Limited Time Offer for our highly-acclaimed Stock Picker Newsletter. Get our fresh Feature Stock Pick now!

“While we expect the lower priced iPhone to carry reduced features like a lower quality screen, casing, and potentially processor, we believe the phone will carry a lower margin than the standard iPhone,” the analyst said.

However, the device will still possibly pull in $6.5 billion in revenue this year at a gross margin of around 30 percent — while current iPhone models have a gross margin between 55 and 60 percent. And while the average selling price of the Apple smartphone was likely to fall from its current level of around $640 to about $520, by the end of 2013, 30 percent of all iPhone sales would be from this new model, Munster said.

Don’t Miss: Analyst: Here’s Why Apple Needs a Cheaper iPhone.

More Articles About:   , , ,