14 DAY TRIAL // Apple launched the iPhone XS and iPhone XS Max with 512GB storage versions, and by the looks of things, these models are selling like hot cakes.
Citi Research analyst Jim Suva says most customers go for higher capacity models rather than the base versions, which in turn increases the average selling price (ASP) for the Cupertino-based tech giant.
The analyst firm has thus increased its APPL price target from $230 to $265, emphasizing that Apple makes more money by selling the top iPhone XS configurations.
Memory prices have dropped earlier this year, and it’s estimated that Apple spends approximately $20 on a storage upgrade, whereas customers are required to pay $100 to increase the storage size of iPhone XS and iPhone XS Max.
“We increase our financial model primarily due to higher ASPs [average selling price] & stronger gross margins given the consumer preference for higher memory configurations of iPhones coupled with the new falling memory prices. We believe Apple shares are now set up as an attractive value investment with right-sized expectations,” the analyst says in a note to investors.
2018 iPhone pricing
Apple’s new iPhone XS is available in the United States starting at $999, while the top-of-the-range XS Max configuration with 512GB storage is sold for $1,449.
The Cupertino-based firm will also launch a more affordable iPhone later this month. Called iPhone XR, the device will boast an LCD screen, no 3D Touch, a single camera instead of two on the back, and come in a wide variety of colors. Pricing will start at $749 in the United States and Apple itself expects this model to account for more than 50 percent of all 2018 iPhone sales this year.
The original iPhone X is no longer available for purchase, as Apple is betting all-in on the new-generation devices launched this year.