Apple's Move to Absorb Higher Component Costs Will Help iPad 2

Filed under: Apple Inc (AAPL)

The recent Japanese earthquake led to supply constraints and consequently higher prices for many of Apple's component suppliers. However, Apple has agreed to absorb the additional costs related to components in exchange for smooth shipments. Although Apple's profitability could be slightly impacted due to higher costs, we believe it's still a market share game for Apple's hit products like the new iPad 2 and so ensuring on time deliveries will put more pressure on the likes of Motorola Mobility and Research in Motion that are trying to work their way into the tablet market. We maintain $420 price estimate for Apple stock, which is about 20% above market price.

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Apple's Move to Absorb Higher Component Costs Will Help iPad 2 originally appeared on BloggingStocks on Thu, 07 Apr 2011 11:00:00 EST. Please see our terms for use of feeds.

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