On Friday, an HSBC analyst maintained a Hold rating on Apple Inc (NASDAQ:AAPL) with a price target of $180.00. The analyst highlighted the robustness of Apple's business model due to the deep integration of hardware, software, and services across its product range.
This integration has led to a significant customer retention rate, as evidenced by the over 2 billion installed hardware base and a record number of iPhone upgrades in the first quarter of fiscal year 2024.
The analyst pointed out that Apple's ecosystem creates a high level of customer loyalty, making it difficult for users to switch to other products, which has been a key factor in the company's growth.
The recent adoption of the Digital Market Act in March 2024 in Europe has already prompted Apple to alter its App Store policies, including allowing developers to offer apps on alternate marketplaces and enabling NFC technology for banking and wallet applications.
The Americas region, which accounts for 42% of Apple's global revenue, along with the iPhone, which represents 52% of the company's worldwide sales, are significant contributors to the tech giant's financial performance. Service offerings, which include the App Store and accounted for 22% of Apple's revenue in fiscal year 2023, boast a much higher gross margin of 71% compared to the hardware's 37%.
The analyst also noted potential implications of the Department of Justice's case against Apple, suggesting that if the DoJ's allegations are proven, it could lead to further operational changes for Apple similar to those seen in Europe.
The analyst's remarks reflect the current situation as of February 2, 2024, when the initial assessment of Apple's hardware base and its readiness for virtual reality and general artificial intelligence was published.
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