Piper Sandler hikes Apple target $5 to $135

U.S. carriers are practically giving the iPhone 12 away says analyst Harsh Kamar.

From a note to clients by  that landed on my desktop early Thursday:

We are raising our Apple iPhone estimates, as we believe the heavy carrier promotions will drive significant upgrades for the iPhone 12 series. The iPhone 12 launch has become a subscription battleground for carriers, as they are all offering sizable promotions to keep or add new customers. We feel these promotions will drive iPhone 12 demand over the next several months, which is in sharp contrast to our survey that pointed to somewhat lackluster demand. We note these promotional activities have unfolded shortly after the October 13 launch and a few weeks after our survey. Overall, we continue to believe Apple will be the premiere 5G smartphone provider across the globe over the next several years. We reiterate our Overweight rating.

Carrier Subsidies Create a No-Brainer Upgrade: Overall, we see demand for the iPhone 12 series being strong, contrary to our recent survey. The major difference in our thinking is the carriers are being extremely aggressive with subsidies, almost to the point where they are giving the phone away for minimal costs. In our view, it is nearly impossible for the consumer to ignore the upgrade possibility given the current subsidy offerings. For example, AT&T is offering up to $800 in its promotion, which compares to $850 price tag for a 128GB iPhone 12.

Maintains Outperform rating, raises target to $135 from $130. 

Cue quotes from the carriers:

piper jaffray apple price target 135

My take: I'm surprised more analysts haven't seen the light.

7 Comments

  1. Gregg Thurman said:
    almost to the point where they are giving the phone away for minimal costs.

    Gee, that’s too bad (note sarcasm).

    I’ve whip sawed on my decision to upgrade on reports of just how bad 5G coverage is, but with discounts up to $800 the point may be moot.

    3
    October 22, 2020
    • Romeo A Esparrago Jr said:
      Gregg,
      I’m looking for other reasons beyond 5G to upgrade to a 12. My XS does not have the camera upgrade that started with the 11 and now there’s LiDAR too in the Pro?
      I think a hefty discount or good deal is an additional factor for folks to consider. I don’t upgrade every year (before the XSMax, I had the 6S Max), so I am usually extremely pleased by what I see are major upgrades between my purchases.

      January is my target!
      Why not now?
      I have more prioritized life things to do before January so iP12ProMAX can wait.

      CONGRATZ on your 12, I hope you get it and love it! 🙂

      2
      October 22, 2020
    • Fred Stein said:
      Same here.

      At first I thought wait for Apple’s 5G silicon. Plus I’m ready to ditch ATT. Throw in almost free upgrade.

      2
      October 22, 2020
      • David Emery said:
        My phone (en-route) is SIM-Free. I’ll go to T-Mobile and see if I can borrow a SIM to evaluate their service in my neighborhood (where ATT service is spotty.)

        But I was never able to make sense of the net cost for the Telco options, so I can’t verify the actual ‘give away’ part!

        0
        October 22, 2020
  2. Jerry Doyle said:
    “… we continue to believe Apple will be the premiere 5G smartphone provider across the globe over the next several years.”

    There seems evolving among most WS analysts a new and refreshing spirit-of-edification that Apple deserves its higher multiple and is positioned as the avant-garde in the tech industry for the next decade.

    3
    October 22, 2020
  3. Fred Stein said:
    Yup, Jerry and Philip.

    Apple’s commanding lead in SmartPhones, drags along all their other products.

    Only a few analysts understand the depth and breadth of Apple’s lead.

    3
    October 22, 2020
  4. John Konopka said:
    I wonder if the constant advertising of the iPhone 12 being the best by the carriers is turning into a self fulfilling prophecy. People who don’t pay a lot of attention to this see the iPhone 12 ads everywhere and gain by osmosis the idea that the iPhone 12 is the one to get. I guess that is what advertising is for.

    0
    October 22, 2020

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