Apple Inc. showed off many new products at its event on September 9, and some of them have flown a little under the cover of the iPhone 6S. The iPad Pro, a tablet designed to take back the market for Tim Cook, didn’t exactly impress Wall Street. The word “incremental” was thrown around quite a lot after the device was shown off. Goldman Sachs disagrees.
In a report on Apple released on Tuesday morning, Goldman said that there were three reasons to own stock in Apple. One of those was the iPad Pro, which the Wall Street bank reckons will bring a “consumer refresh” cycle to the tablet world. Apple has had real problems getting iPad users to upgrade their device. Goldman reckons the iPad Pro will solve that issue.
Selling the iPad Pro
Goldman reckons that the iPad Pro is the key that Apple needed to unlock demand in the tablet market. The bottom line for the analysts is that the new device will “drive a consumer refresh, expansion into enterprise, and higher ASPs.”
If Apple could hit all three of those notes in the year ahead, Tim Cook can claim to have saved the iPad business. Sales of the firm’s tablet have crashed over the last two years as fewer and fewer people opt to buy new tablets. Stories that the death of the category has already been reached have become more and more common.
The iPad could, if Apple can’t save the tablet business, turn into a product much like the Apple Newton. It may not be remembered by kids in a decade or two if people stop buying them. Tablets are sinking back into a niche, and Apple is trying to change that in order to build another business that can help it grow.
Goldman Sachs reckons that the iPad Pro, despite its weakness on some fronts, will be well able to do just that.
Apple shares have lofty targets
The Goldman Sachs report, despite being quite bullish on the future of the iPad Pro, is pretty moderate when compared to some of the other pieces of research released on Apple in recent weeks. The analysts put a Buy rating on shares in the Cupertino firm.
They put a $163 twelve month price target on Apple and said that they were effusively positive about sales and earnings in the months ahead. Apple will release its next earnings report toward the end of October, and wil reveal its all important fourth quarter sales some time in January.
Apart from the iPad business, the firm will gain on sales of the iPhone 6S in the year ahead says the Goldman Sachs researchers. The analysts reckons that the firm will see year on year sales growth of 6 percent in the year ahead. That’s stronger than more bearish analysts, like Sherri Scribner of Deutsche Bank, reckon Apple’s iPhone 6S will sell.
UBS analyst Steven Milunovich is one of the single most bullish voices out there on iPhone 6S sales right now. In a report published on September 17 Mr. Milunovic said he thought that sales of the device would spike on the back of the pay-by-installments program Apple announced on September 9 beside its latest smart phone.