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Don't Fret Apple (AAPL) Carrier Subsidies Cut, the iPhone 5 Will Keep Them Paying Up the Nose - Analyst

Posted by The Staff on Apr 18, 2012 4:30 PM

In the call of the day, Goldman Sachs analysts raised their price target on Apple (Nasdaq: AAPL) from $700 to $750. The topic of carrier subsidies and tighter upgrade policies was particularly interesting, since it has been a major concern to investors. However, the report points out that these fears are likely to be overblown, especially near term as vendors prepare for the release of iPhone 5.

"The iPhone 5 launch is likely to be one of the most important smartphone product cycles we’ve seen to date, and we find it very hard to believe that a large number of carriers will lower subsidies and risk share loss during this launch."

Long term, Goldman acknowledges that the risks of losing market share because of subsidy reduction and other concerns is "too great to ignore", but for now they feel confident that it will be business as usual at the Apple.

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