Apple Margins to Slip 1.5%, iPhone ASP Up 12% Ahead of AI Launch
Bernstein’s Mark Newman forecasts memory chip costs will cut Apple’s margins by 1.5% and raise iPhone component expenses by 15%, boosting ASP by 12%. He lifted his target to $340 from $325, citing the 2026 launch of Apple Intelligence with on-device AI and Google’s Gemini.
1. Analyst Forecasts Memory Impact
Bernstein analyst Mark Newman expects escalating memory chip prices to shave 1.5 percentage points off Apple’s gross margin while increasing iPhone component costs by 15%, driving a 12% rise in average selling price this year.
2. Price Target Raised to $340
Newman raised his price target to $340 from $325, reflecting confidence that price hikes and operational efficiencies will offset cost pressures and support earnings growth.
3. Apple Intelligence as Growth Catalyst
He highlighted Apple Intelligence’s expected 2026 rollout, noting on-device AI capabilities and integration with Google’s Gemini models as pivotal for long-term revenue expansion and user engagement.