Analyst: Falling Margins Won’t Hurt Apple
Apple’s vertically integrated hardware-software-services model would be enough to provide the company “almost unique latitude to manage the price/gross margin dilution,” he said.
And while the smartphone market share gap between Apple and rival platforms may be getting wider, the iPhone maker would be able to maintain its success by controlling its own product cycles, hardware and software engineering, and services ecosystem. Cihra said his calculations allowed Apple’s business model to sustain margins meaningfully higher than its peers even after the introduction of a new low-cost product.
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