UBS forecasts iPhone ASP at $660, pushing Apple's June margins to 40.9%

Posted:
in AAPL Investors edited July 2015
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.
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Comments

  • Reply 1 of 28

    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.

  • Reply 2 of 28
    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.
  • Reply 3 of 28
    dasanman69dasanman69 Posts: 12,980member
    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.
  • Reply 4 of 28
    sog35 wrote: »
    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

    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?
  • Reply 5 of 28
    Quote:

    Originally Posted by dasanman69 View Post



    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.

  • Reply 6 of 28
    dasanman69dasanman69 Posts: 12,980member
    dasanman69 wrote: »
    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.

    I'd like to see [@]sog35[/@] kicking and screaming about all the billions Apple is losing out on by switching the second tier from 32GB to 64GB.
  • Reply 7 of 28
    fallenjtfallenjt Posts: 3,976member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    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.


    "get away with it"? Please. 16GB will fit most people's needs especially those in third world countries. The reason many opted for 64GB because it's a good deal jumping from 16GB. If Apple drop 16GB for 32GB with the same price, many and many 64GB iPhone owners will drop back to 32GB. That's a loss for Apple.

  • Reply 8 of 28
    MacProMacPro Posts: 18,216member
    fallenjt wrote: »
    "get away with it"? Please. 16GB will fit most people's needs especially those in third world countries. The reason many opted for 64GB because it's a good deal jumping from 16GB. If Apple drop 16GB for 32GB with the same price, many and many 64GB iPhone owners will drop back to 32GB. That's a loss for Apple.

    It's quite the norm for RAM and computing stuff in general to go 2,4,8,16,64,128 etc. when you look back in history. Not so many 32's show up, nor 96's.
  • Reply 9 of 28
    fallenjtfallenjt Posts: 3,976member
    Quote:
    Originally Posted by digitalclips View Post





    It's quite the norm for RAM and computing stuff in general to go 2,4,8,16,64,128 etc. when you look back in history. Not so many 32's show up, nor 96's.

    32 is a norm too, not 96 because of binary computation (double for the next ON digit): 000000000 -> 0, 000000001 -> 1, 000000010 ->2...and so on. Bottom line it's 2^n with n = 0,1,2,3,4....so, you will never get 96 with this format.

  • Reply 10 of 28
    flaneurflaneur Posts: 4,509member
    dasanman69 wrote: »
    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.

    If the chart's inaccurate does that mean someone's lying? No, maybe just mistaken.

    Did Phil say 16 GB was the most popular? Was he lying or mistaken? Reference please.
  • Reply 11 of 28
    flaneurflaneur Posts: 4,509member

    Phil's in marketing. That entire profession is built on lies.

    The entire profession is not based on lies, particularly when it's attached to ethical companies.
  • Reply 12 of 28
    anantksundaramanantksundaram Posts: 19,152member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    Phil's in marketing. That entire profession is built on lies.


    What an utterly uninformed, bombastic, and wrong post.

     

    Way to gain credibility, TheWhiteFalcon! More. /s

  • Reply 13 of 28
    dasanman69dasanman69 Posts: 12,980member
    flaneur wrote: »
    dasanman69 wrote: »
    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.

    If the chart's inaccurate does that mean someone's lying? No, maybe just mistaken.

    Did Phil say 16 GB was the most popular? Was he lying or mistaken? Reference please.

    He has first hand knowledge of the numbers. How could he be 'mistaken'?
  • Reply 14 of 28
    What an utterly uninformed, bombastic, and wrong post.

    Way to gain credibility, TheWhiteFalcon! More. /s

    Because I devote my life to making sure Internet keyboard warriors like me.

    Not.
  • Reply 15 of 28
    dasanman69dasanman69 Posts: 12,980member
    sog35 wrote: »
    dasanman69 wrote: »
    I'd like to see [@=/u/191133/sog35]@sog35[/@] kicking and screaming about all the billions Apple is losing out on by switching the second tier from 32GB to 64GB.

    rubbish.

    Moving it from 32 to 64 helped profits.  It lead to more people moving up to the 2nd tier.

    Which used to be a $200 upgrade now it's only $100. Billions squandered.
  • Reply 16 of 28
    flaneurflaneur Posts: 4,509member
    sog35 wrote: »
    Phil could have been referring to the last couple years (5/5S/6) not just the last couple quarters

    Correct. Also, the numbers for the 6 and 6 plus are skewed to higher options because of richer US, Chinese and other early adopters. But then we don't know how the accusers are deriving their "liar" judgment.
  • Reply 17 of 28
    dasanman69dasanman69 Posts: 12,980member
    sog35 wrote: »
    dasanman69 wrote: »
    Which used to be a $200 upgrade now it's only $100. Billions squandered.

    dumb.  That's simpleton math and you know it.

    You know best because that's the math you use.
  • Reply 18 of 28
    fallenjtfallenjt Posts: 3,976member
    Quote:

    Originally Posted by Flaneur View Post





    If the chart's inaccurate does that mean someone's lying? No, maybe just mistaken.



    Did Phil say 16 GB was the most popular? Was he lying or mistaken? Reference please.

    Yes, he did...but only before the release of iPhone 6/6+

  • Reply 19 of 28
    anantksundaramanantksundaram Posts: 19,152member

    Because I devote my life to making sure Internet keyboard warriors like me.

    Not.

    It's not about being 'liked'. For example, I am not making too many friends among a certain segment of posters with my posts either.

    It's about being as fact-based as one can be, without throwing around bombastic undefendable pap.
  • Reply 20 of 28
    dasanman69dasanman69 Posts: 12,980member
    sog35 wrote: »
    dasanman69 wrote: »
    You know best because that's the math you use.

    I never said moving the second tier to 64 was a mistake.  You said it.

    NEXT.

    What used to be a $200 upgrade is now only $100 upgrade. $100 less per phone plus lower profit margin. It's exactly everything you claim would happen if the lower model would be if the lowest model was 32GB.
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