Apple’s iPhone Price Strategy Faces Margin Challenges
Bank of America analyst Wamsi Mohan has reduced Apple’s price target from $380 to $370 following the release of the iPhone 18 Pro and Pro Max. The Pro starts at $1,199 and the Pro Max at $1,299, both $100 higher than their predecessors but below Mohan’s expectations, leading to concerns about slipping profit margins amidst rising memory costs.
Despite the pricing strategy, Apple maintains a robust position with 2.5 billion active devices globally. The company has forecasted fourth-quarter gross margins between 47% and 48%, down from 50% in the previous quarter, as it navigates increasing costs and seeks to balance device prices and absorption of expenses. The upcoming foldable iPhone Duo is anticipated to contribute to revenue, potentially improving margins in future years.
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