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Apple: NAND Pricing Weakness Good For Margins

|Includes:Apple Inc. (AAPL)

Apple (NASDAQ:AAPL) guided to 41.5% gross margins in the June quarter, down from 47.4% in the March quarter. While we know that Apple is very conservative with guidance since it has exceeded its gross margin guidance by at least 230 basis points for the past fifteen quarters Digitimes is reporting that NAND pricing continued to slide in the second half of April. http://www.digitimes.com/news/a20120504PD202.html?source=email_rt_mc&ifp=0

While it is still early in the June quarter this is an indication that Apple should meaningfully exceed its gross margin and EPS guidance of $8.68. I am currently estimating a gross margin of 45% and EPS of $11.65.

Disclosure: I am long AAPL.

Stocks: AAPL