The Street has called for Apple (AAPL) to launch a low-end iPhone that will help it attack emerging markets, but it also continues to panic over what might happen to the company’s margins once the new phone launches. Barclays Capital is the latest firm to revive the Apple margin conversation and it lowered its price target on Apple shares to $530 from $575 in the process. In a recent note picked up by ValueWalk on Thursday, Barclays analysts argue that Apple must somehow prove to investors that margins will not dip below 35%.
“Barclays believes that margins are the biggest concern for investors,” the report states. “While Apple Inc. understands the market concerns, they do not believe that management is ready to give a long-term target. However, it doesn’t seem to them that Apple ‘ever wants to make low-end products’ – and will always strive for premium devices that offer a more complete experience.”
Apple shares closed down 1.26% at $425.66 on Wednesday.