Apple outperforms as sell-side gives thumbs-up to new iPads

Goldman's Bill Shope (Buy, $560 PT) is nudging his FY14 Apple (AAPL +0.8%) estimates higher following yesterday's iPad launches (I, II),  arguing the quality of the iPad Air and the retina Mini's price points should yield higher iPad ASPs and unit shipments.

Thanks to a mix shift towards the Mini, Apple's iPad ASP has been trending lower, and was at $437 in the June quarter.

Meanwhile, Lazard's Ed Parker is pleased with the huge incremental margins Apple continues to see on higher-capacity hardware, as well as its willingness to provide free software to get consumers to buy.

Though NAND flash prices have fallen plenty over the last three years, Apple still charges $100 more for a 32GB iPad than a similar 16GB iPad, and another $100 more for a similar 64GB model. Google and Amazon only charge $40 more for 32GB versions of the Nexus 7 and Kindle Fire HDX. Another $40 gets Amazon customers a 64GB HDX.

Not everyone buys into the wisdom of Apple's pricing strategy, which follows a Q2 for which IDC estimated the company's tablet unit share fell to 32.4% from 60.3% a year earlier.

Troy Wolverton: "You know things are out of whack when the best-priced iPad still costs $500 and Apple is offering a 2-1/2 year old model at a price that is $40 more expensive than a comparably sized -- but brand new -- Samsung tablet."

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Comments (21)
  • ChuckJones
    , contributor
    Comments (112) | Send Message
    The iPad's ASP was $449 in the March 2013 quarter.
    It was $436 in the June quarter.
    23 Oct 2013, 01:19 PM Reply Like
  • redponydoc
    , contributor
    Comments (356) | Send Message
    A 2 and 1/2 year old IPad is more expensive than a brand new Samsung tablet....because it should be.
    23 Oct 2013, 01:36 PM Reply Like
  • Robert McDonald
    , contributor
    Comments (1496) | Send Message
    Apple can maintain this pricing strategy because plenty of customers are willing to pay to get the Apple quality, functionality and reliability that Android devices do not offer. The trade off is in maintaining an appropriate amount of market share vs. margins, not to dominate market share. They do this very well.
    23 Oct 2013, 01:39 PM Reply Like
  • Macnor
    , contributor
    Comments (122) | Send Message
    U r complainting! U should try living in Denmark with double pricing
    23 Oct 2013, 01:40 PM Reply Like
  • okeleyjm
    , contributor
    Comments (3) | Send Message
    Danes are always rated as the happiest people on earth. I guess paying double is the key to happyness.
    23 Oct 2013, 05:59 PM Reply Like
  • rcpatrick5443
    , contributor
    Comments (884) | Send Message
    Things may seem "out of whack" to Troy Wolverton, but Apple's making heaps of money with the prices that critics deride ...
    23 Oct 2013, 01:50 PM Reply Like
  • rheimerl
    , contributor
    Comments (488) | Send Message
    id take the 2.5 year old ipad over a Samsung tablet any day of the week...troy
    23 Oct 2013, 01:52 PM Reply Like
  • chopchop0
    , contributor
    Comments (5157) | Send Message
    Lots of people won't though. The figures speak for themselves. I wouldn't pay $300 for a mini tablet
    23 Oct 2013, 03:42 PM Reply Like
  • gelstretch
    , contributor
    Comments (3505) | Send Message
    Hey boys ( and gurls).... Why would Mercedes Benz sell a new model, just to compete with Ford on Ford's price point. Give the Apple marketing staff more credit than that.


    Apple is taking the "high road", and their strategy is working well.... anybody checked their balance sheet lately ? Apple is known for quality, and innovation, and therefore they deserve a higher price point, than their "copy-cat wanabee competitors"


    These analysts that are "just bent" over the Apple pricing, have never studied much about marketing, and profit strategies. The final arbiter of this subject matter is the earning report each quarter.... so far, all is well with Apple's strategy.
    23 Oct 2013, 02:22 PM Reply Like
  • samitch
    , contributor
    Comments (24) | Send Message
    Absolutely, yes sir !!!!!!!!!!!!!!!!
    24 Oct 2013, 03:45 AM Reply Like
  • Brandond
    , contributor
    Comments (501) | Send Message
    I don't get the analysts who complain about the high pricing: seems like the car analyst complaining why Mercedes/BMW/Audi all charge more than lesser car brands. All 3 of my kids want 1 thing for Christmas-Either the new ipad and 1 wants the 5s phone. Am I really going to push to save $100 on the ipad and get something less wanted when the ipad last 2-3 years?


    Price doesn't matter for the type of customer Apple wants and those customers like me spend a lot of $ in the app store.
    23 Oct 2013, 02:25 PM Reply Like
  • f16flyer1983
    , contributor
    Comments (214) | Send Message
    Give a teenager a Nokia smart phone and be prepared to duck because they will be throwing it right back at your head telling you how you ruined their life. Make life easier on everyone and just buy them (teenagers) Apple products.
    23 Oct 2013, 02:52 PM Reply Like
  • the juice
    , contributor
    Comments (11) | Send Message
    One of the more humorous comments I have seen and right on target.
    23 Oct 2013, 03:28 PM Reply Like
  • spald_fr
    , contributor
    Comments (2814) | Send Message
    Nicely put.
    23 Oct 2013, 04:04 PM Reply Like
  • ChiefEngineer
    , contributor
    Comments (135) | Send Message
    I've been a Mac user for 23 years, and I'm an engineer that compares most devices to marine equipment. Apple's elegant, easy to use, eco system, software is superior, etc. But, along with the elegance is the hardiness, durability, and toughness of the machines themselves. They run and run like something above consumer level into industrial strength. My wife and I have dropped Powerbooks and iPand on hard tile and they suffered dents and never missed a beat.


    In a manner of speaking they are like farm tractors as well as elegant high end autos.
    23 Oct 2013, 03:18 PM Reply Like
  • investingInvestor
    , contributor
    Comments (2463) | Send Message
    My children's smartphones used to fall apart 6 months or more before their contract was up. That was some years ago.


    My children have not had a problem with a Mac, iPad, or iPhone failing, except one was drowned. Also, they rely on Apple support to bail them out, for free.


    Apple devices might or might not cost more than cheap wannabe devices, after you include failure rate, continuing frustration, disappointment, repair costs, lack of tech support, lost time struggling, and the robust resale market for Apple devices.


    Are Apple devices less expensive than Samsung after total lifecycle costs are included??? Yeah!!!
    23 Oct 2013, 04:11 PM Reply Like
  • Yokyok
    , contributor
    Comments (327) | Send Message
    I will never cease to be amazed at how delusional apple fans can be.
    23 Oct 2013, 04:19 PM Reply Like
  • jeezuz30
    , contributor
    Comments (636) | Send Message
    wow apple fans getting drunk on the koolaid
    23 Oct 2013, 04:23 PM Reply Like
  • financeminister
    , contributor
    Comments (1215) | Send Message
    as much as I am not a fan of Apple products, I'm a fan of AAPL stock... I'm more inclined to think that Apple fans will continue paying a premium for Apple products as long as they feel the newer tablets are much better than the older ones. I got convinced on that part when they went gaga over a new color options for the iPhone being a key improvement over the previous version.
    23 Oct 2013, 04:32 PM Reply Like
  • Robert McDonald
    , contributor
    Comments (1496) | Send Message
    I don't think most iDevice purchases care much about color. I doubt anyone buys an iDevice because of the color option available. They care about functionality as evidenced by iDevice internet usage dominance and the demand for aps on iOS. Just wait until the Entertainment, Games and iAd dollars start pouring in. All shareholders will be appreciating the higher end audience even more.
    23 Oct 2013, 04:49 PM Reply Like
  • Methusulapi
    , contributor
    Comments (8) | Send Message
    I agree with the analysts. They'll never stop banging their heads against steel walls" cuz they are intent on trying to control Apple's business intelligence - tactical and strategy like they do other companies and the other jealous spoilt brats who'd like to humble this great innovator. In fact some of the brats are so besides themselves that this position has given rise to bandwagon full of them taking about Apple now morphing into a value play blue chip outfit! Apple will mover know tow to the mass market analysts--- are they the voice of the customer? As Apple banks the endless "ka-chings" that end up in the receivables bucket look for an ever widening of their humongous cash cushion!! Thank u very much ....
    23 Oct 2013, 05:59 PM Reply Like
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