Federal Reserve Chair Kevin Warsh's first policy meeting drew mixed reactions from economists, with attention centered on his decision not to submit a dot plot projection, his inflation messaging and his plans to reform the institutionThe Fed held rates steady at 3.50%-3.75% on Wednesday and reiterated its commitment to restoring price stability.
Apple Inc. (NASDAQ: AAPL) is adjusting its product pricing strategies to mitigate escalating supply chain expenses, according to an analyst note released by Bank of America Securities (BofA Securities) on Thursday. BofA maintained its Buy rating and price forecast of $380 on the consumer electronics manufacturer.
Pricing Adjustments to Offset Memory Costs
The analyst update followed an exclusive interview published by the Wall Street Journal on Wednesday, where outgoing Apple CEO Tim Cook stated that Apple is forced to raise pricing to counter rising memory component costs.
In response, BofA raised its average selling price estimates by an additional $100 for the iPhone Pro and Pro-Max models, while leaving the base model and Air pricing unchanged. BofA noted this strategy "leverages share gains at the lower end and pushes prices higher in the more inelastic segments."
Margin Impacts and Demand Projections
BofA factored pricing increases into the Mac and iPad categories, which led to a marginal reduction in unit demand estimates across all product segments.
The firm projected a potential 100-basis-point gross margin headwind for hardware products. However, BofA stated it expects stable service margins with potential upside to serve as an offset, alongside supply chain efficiencies and the use of recycled materials.
Supply Chain Posit...
