By Senad Karaahmetovic
A Goldman Sachs analyst has previewed Apple’s much-anticipated “Far Out” event that is due to start today.
Apple (NASDAQ:AAPL) will launch the iPhone 14 today with analysts mostly focused on the prices given that the Cupertino-based tech giant is experiencing higher input costs.
“We do not believe it is likely that Apple raises Pro model prices because we believe this potentially would generate lower gross profit contribution by prompting Pro owners to downshift in greater numbers to lower ASP non-Pro devices,” the analyst told clients in a note previewing the event.
Instead, the Goldman Sachs analyst believes Apple’s focus is on “maximizing margins in the non-Pro models and "catching" some Pro downgrades with a higher ASP 14 Max product that also has strong margin characteristics.”
While his view on prices concerns the U.S. market, the analyst acknowledges Apple is likely to “correct local currency prices” to take into account the ongoing USD strength.
Besides the iPhone, he is also looking to hear more from CEO Tim Cook about the possibility of launching a higher-priced Pro Watch, as well as more information about the popular AirPods Pro product.
Goldman Sachs rates Apple at Neutral with a $139 per share price target.