During its third fiscal quarter conference call Monday, the Cupertino-based Mac maker caught analysts and investors off-guard by guiding average company gross margin down to 31.5 percent for the current quarter ending September, and down to 30 percent for all of fiscal 2009.
Addressing clients in a report Tuesday, analyst Gene Munster said there appear to be two primary reasons for the margin guidance, which surprised even those experts who've grown accustomed to the company's traditional low-ball estimates.
First, he said, management is likely continuing with its historical practice of guiding gross margin 270 basis points (2.7 percent) below the previous quarter's actual margin. Secondly, he believes the company is preparing to cut the prices of existing products to maintain its momentum during a time of economic uncertainty.
"We believe there is an 80% chance Apple will introduce redesigned MacBooks and possibly new MacBook Pros at lower price points," he wrote. "Specifically, Apple may re-enter the $999 price point (currently $1099) with the MacBook, or test the $1,799 price point with the MacBook Pro (currently $1999)."
The analyst also expects "slightly redesigned iPods" that will include "lower-cost touch-based iPods" in time for the holiday buying season. "We believe Apple is getting slightly more aggressive with its pricing; but overall the company is not diverting from its strategy of premium pricing," he said.
While the focus this week will be "anxiety over gross margin," Munster believes it's only a matter of time before Wall Street clears its head and looks past margin guidance to focus on fundamentals, such as the upcoming product transitions and the positive impact those new products will have on revenue growth.
The Piper Jaffray analyst reiterated his Buy rating and $250 price target on shares of Apple.