In a research note on Monday, Pacific Crest Securities analyst Andy Hargreaves outlined the following price increases:
- In July, 2GB, 4GB and 8GB flash spot prices rose about $2.92, $3.29 and $1.17 respectively. This jump is expected to crimp iPod and iPhone profit margins.
- LCD panel prices increase 8 percent in July. This is expected to ding Mac profit margins.
He also noted that the component price increases are expected and that Apple should be able to offset them with strong demand.
But why just focus on Apple? Both HP (NYSE:HPQ) and Dell (NASDAQ:DELL) have benefited from component costs. As these costs increase profit margins could slip. But if things go as planned, a second half boost in demand should allay any worries.