Analysts Applaud Apple's New iPhone Pricing Strategy

6/10 - "Analysts are not just impressed by the faster, sleeker update to Apple Inc.'s iPhone, but the surprise change in its carrier revenue sharing agreement will drive cash flow quicker to the computer giant.

Citigroup Capital Markets analyst Richard Gardner is upgrading his price target for Apple stock from US$248 to US$287 over the news, which he estimates will increase free cash flow by US$2-billion for 2009.

RBC Capital Markets analyst Mike Abramsky said in a note to clients today that by waiving its carrier revenue sharing agreement in place of subsidies, Apple will lose higher-margin service revenue, but may see carriers drive increased volumes through compelling pricing..."We estimate Apple needs to sell 60% more subsidized handsets vs. unsubsidized to offset the loss of service revenue...$199 pricing can boost sales over 100%," he said, who maintains i...