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."