The first results are coming back from the initial sales of the iPhone XS and iPhone XS Max and they are generally good.
So much so that stock market analysts are raising their Apple share price targets for the year on the back of them. Citi Research have issued a new investor note that says its customers are already favoring the models with the higher onboard storage such as the 512GB model.
Citi have raised their forecast for Apple’s share price – AAPL -from $230 to $265. In the note, Citi analyst Jim Suva said that the firm’s reasoning behind the increase are the higher selling prices for the iPhone XS and the tendency to buy the large memory models.
“We increase our financial model primarily due to higher ASPs [average selling price] & stronger gross margins given the consumer preference for higher memory configurations of iPhones coupled with the new falling memory prices.
“We believe Apple shares are now setup as an attractive value investment with right-sized expectations.”
They also noted that while the higher memory configuration costs the consumer approx. $100 more per unit, it only costs Apple $20 more to produce due to the fact that flash memory prices have dropped by 18% since March this year.
Citi’s supply chain checks show that for buyers of both the iPhone XS and iPhone XS Max that they are opting for the bigger memory configurations. Suva said: “Our checks suggest solid demand for iPhone XS & XS MAX and importantly most consumers opting for higher memory iPhone configurations”.
Popular Apple watcher Ming-Chi Kuo backed this finding up and recently claimed that the 256GB iPhone XS model was the most popular of the new range according to his research and observations.