Why the next iPhone could help Apple recover its margins

BGR.com
Apple iPhone 5S

iPhone 5

By now we’re all familiar with the main reason Apple (AAPL) shares have tanked over the past few months: Investors are worried that the company’s growth has stalled and that its margins have already passed their peak and are headed for a long decline. However, AppleInsider points us to a new research note from Morgan Stanley analyst Katy Huberty, who says that Apple’s gross margins should recover later this year after the company launches its next iPhone.

[More from BGR: iOS 6.1 untethered jailbreak now available for download, compatible with iPhone 5 and iPad mini]

Huberty reasons that Apple’s recent margins have taken a hit after the company spent around  $4.5 billion to purchase new hardware for the iPhone 5 and its larger display. Now that Apple has gotten a knack for building the bigger iPhone — and especially now that manufacturers have been producing higher yields for the device — Huberty thinks the company will spend significantly less on components for the so-called iPhone 5S that the company is rumored to be launching this June.

[More from BGR: iOS 6.1 jailbreak set for release today]

Despite this, Huberty still doesn’t see Apple returning to the glory days of 2012 when its margins peaked at almost 44%. Rather, she and Morgan Stanley project Apple will post margins of 38.7% for 2013.


This article was originally published on BGR.com

View Comments (94)