Apple (AAPL) ASPs Could Surprise to the Upside, RBC Says
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RBC Capital analyst Amit Daryanani said based on their recent iPhone 7 survey results, they believe Apple (NASDAQ: AAPL) ASPs (average selling price) could be the 'WOW' factor this EPS season.
"Our survey work around iPhone 7 and analysis suggests AAPL could see ASP's flat to up modestly on a y/y basis vs. current street models that are modeling ASP’s down ~5-10%," Daryanani said.
This views is based on:
1) We think demand is substantially skewed towards 7+ this product cycle vs. prior two years; our survey work shows ~700-800bps of incremental demand towards the 5.5” form factor vs. last year, 2
) AAPL actually raised pricing on iPhone 7+ and is charging a $120 premium vs. a $100 premium historically,
3) Memory – overall this could be a modest headwind but broadly consumer preference remains around the "mid-tier" phone vs. low-end.
Net/net, the analyst said, "While we realize expectations are getting high, we think AAPL could show not only modest revenue upside in Sept-qtr, but more importantly, provide a more robust Dec-qtr guide, that would be materially ahead of street expectations."
The firm maintained an Outperform rating and price target of $125.
Apple is scheduled to report Q4 2016 results on October 25, 2016 after the close.
Shares of Apple closed at $113.89 yesterday.
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