This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How the iPhone Air Gives Apple a Boost

NEW YORK (TheStreet) -- The next iPhone, dubbed by many to be the iPhone Air, is going to be a huge product push for Apple (AAPL - Get Report)

Pacific Crest Securities analyst Andy Hargreaves boosted Apple, raising it to "outperform" with a $635 price target, as he believes the next iPhone, which he calls the iPhone 6, could be priced higher than the iPhone 5s, and return growth to Apple in fiscal 2015.

"We believe Apple can sell a 4.7" iPhone at a subsidized price of $299, which should generate incremental gross profit on replacement sales and attract new customers that had previously purchased Android phones specifically for a larger screen," Hargreaves wrote in a note.

AAPL ChartAAPL data by YCharts

Speculation has surrounded the Cupertino, Calif.-based Apple on whether it will increase the size of the iPhone to better compete with smartphones using Google's (GOOG)

Apple shares were higher following the upgrade, gaining 0.49% to $533.50 in premarket trading on Tuesday.

Hargreaves said he believes that more than 100 million Android phones were shipped in 2013 with screen sizes larger than 4 inches. With Apple's overall market share being 15%, according to research firm IDC, Hargreaves thinks it's "reasonable to assume that a 4.7" iPhone could capture 10% of the market for smartphones above 4', which suggests an opportunity for Apple to drive an incremental 10 million units of share from Android following the launch of a larger iPhone."

It's thought that Apple will unveil the next iPhone around September or October, which it has done for the past few years, starting with the release of the iPhone 4S.

See Also: What Will Apple's Next iPhone Look Like?

"We expect iPhone replacement rates to remain stable for the foreseeable future, which should underpin strong cash flow to fuel Apple's cash return activity and a still growing net cash balance," Hargreaves wrote in the report.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
GOOG $565.06 0.00%
FB $81.53 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs