Neil Hughes
Investment firm UBS revealed on Thursday that it has high expectations for Apple's gross margins in the just-concluded June quarter, predicting they will reach nearly 41 percent on outstanding sales of the jumbo-sized iPhone 6 Plus.
Analyst Steven Milunovich believes the average selling price of Apple's iPhone lineup reached $660 in the June quarter, based on proprietary research from the UBS Evidence Lab iPhone Monitor, as well as data from Consumer Intelligence Research partners. Milunovich's conclusions were shared in a research note to investors on Thursday, a copy of which was provided to AppleInsider.
Based on strong sales of the iPhone 6 Plus, Milunovich believes that Apple achieved gross margins of 40.9 percent in the quarter. In contrast, consensus on Wall Street currently calls for margins at 39.4 percent.
If the prediction proves accurate, it would mean that Apple exceeded even its own expectations. The company provided guidance for gross margins to be between 38.5 and 39.5 percent back in April.
Apple's iPhone lineup ranges in price from the entry-level $450 iPhone 5c, all the way up to the $949 128-gigabyte iPhone 6 Plus.
CIRP's research found that among iPhone buyers last quarter, the average capacity grew 6 percent sequentially to 45 gigabytes. The data also showed that 18 percent of respondents were switchers from Android handsets.
Looking forward to the next iPhone release cycle, Milunovich believes margins for the "iPhone 6s" will improve. He sees total margins for the company growing to 41.6 percent, also bolstered by what he believes will be improving margins for the Apple Watch.
UBS has maintained its price target of $150 for shares of AAPL, with a "buy" recommendation for investors. Apple will report the results of its June quarter next Tuesday, July 21, after markets close in the U.S.
William Gallagher
Christine McKee
AppleInsider Staff
Chip Loder
Malcolm Owen
28 Comments
The outsized share of 64GB devices is why Apple will keep 16GB around as long as they can get away with it. Surprised we're not hearing "fifty-five or die" again.
I am expecting that Apple will reveal some serious hint of AppleWatch numbers. If nothing else, to quell the utter BS that has become the meme.
A higher percentage of people switched from Android prior to the release of the iPhone 6/6 Plus. What does that say? And if those charts are accurate the 16 GB model is not the most popular option. Someone's lying.
[quote name="sog35" url="/t/187237/ubs-forecasts-iphone-asp-at-660-pushing-apples-june-margins-to-40-9#post_2748924"] agree. Looking at other category should be obvious what the Watch revenue is. Last June Qtr the iPod revenue was $450 million. AppleTV/Beats revenue is immaterial. iPod revenue has been going down 20-30% YoY the last few quarters. So iPod revenue can be estimated at $350 million. AppleTV/Beats combined is probably $150 million max. Minus $500 million from the Other revenue total and you get Watch revenues [/quote] Didn't Beats have something like $1.5 billion in revenue in 2013? How do you drop Beats plus AppleTV down to 150 million for a quarter in 2015? From what dark hole are you pulling these numbers?
A higher percentage of people switched from Android prior to the release of the iPhone 6/6 Plus. What does that say?
And if those charts are accurate the 16 GB model is not the most popular option. Someone's lying.
Phil's in marketing. That entire profession is built on lies.