Foldable iPhone Duo Sparks Profit Margin Concerns for Apple
Apple's latest iPhone Duo has been met with broad praise for its innovative foldable screen and iPad-like productivity. However, analysts covering the stock are concerned that the device is priced too cheaply, which could negatively impact Apple's profit margins.
Bank of America Securities analyst Wamsi Mohan reiterated a Buy rating on Apple but cut his price target to $370 from $380, citing concerns about gross margin erosion due to lower prices. Despite this, Mohan still sees the iPhone Duo as a game-changer for Apple, with potential for 54 million units sold in the September quarter.
TD Cowen also maintained a Buy rating and a $400 price target, but noted that the modest price increases could create headwinds for hardware gross margin over the coming year. Rosenblatt analyst Barton Crockett kept a Neutral rating on Apple, warning of the potential impact on gross margins as memory costs climb.