Expectations for Apple's World Wide Developer Conference keynote presentation on June 8 were high, and UBS analyst Maynard Um thinks the company delivered even though the product announcements were expected. Apple introduced the iPhone 3GS at the event, along with updated MacBook Pro models.
Along with the iPhone 3G S, Apple announced that the current 8GB iPhone 3G price has dropped to US$99 from $199. "We believe the new lower priced 3G should help stimulate some demand, though we think Apple's subsidy from operators likely remains unchanged, which would likely impact margins," Mr. Um said. "However, we continue to believe that high data pricing plans could limit dramatic elasticity to demand."
Mac OS X 10.6, or Snow Leopard, is scheduled to ship in September, and will sell for $129. Mac OS X 10.5 users, however, can upgrade for only $29. "Given its low price, we would not expect any material margin benefit," Mr. Um said.
Mr. Um is maintaining his "Neutral" rating and $120 target price for Apple's Stock. Apple is currently trading in the pre-market at $144.16, up 0.31 (0.22%).