New iPhones test pricing power
With its new iPhone line up Apple has pushed pricing higher, highlighting how it is increasingly reliant on ASP to deliver revenue growth. Evidence to date that iPhone demand is relatively inelastic suggests Apple should be able to drive through these price increases, but with the feature differential across the portfolio arguably narrowing as the spread in prices simultaneously widens, we do see a risk that consumers will trade down to lower tier devices. Combined with a multi-year high PE, we remain Neutral.Apple designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The company's products include: iPhone; Mac; iPad; and wearables, home and accessories, which includes AirPods?, Apple TV?, Apple Watch?, Beats? products, HomePod?, iPod touch? and other Apple-branded and third-party accessories. The company's services include: digital content stores and streaming services; AppleCare, which includes AppleCare + (AC+) and the AppleCare Protection Plan; iCloud, which is the company's cloud service; licensing; and other services, which include Apple Arcade?, Apple Card?, Apple News+, and Apple Pay, a cashless payment service.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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