Apple Inc. crossed the threshold required to reclaim its status as a trillion-dollar company in Wednesday trading, hitting that level for the first time since early November of last year.
The company’s return to that market-cap milestone comes a day after Apple AAPL, +2.59% introduced its new lineup of iPhones and revealed pricing details for its forthcoming gaming and video subscription offerings. Though there were few product surprises in Apple’s latest announcements, the company’s approach to pricing was unexpected and indicated a change in strategy.
Apple shares were up 2.6% in midday trading Wednesday and need to remain at or above $221.28 to secure trillion-dollar status through the close. Analysts expect the company’s pricing moves to make its ecosystem more affordable, though they were divided on whether this approach will have a meaningful impact on the company’s financials in the months to come.
“We believe lower [average selling prices] make sense as price elasticity has really kicked in for iPhones this year,” wrote Barclays analyst Tim Long, who rates the stock at equal weight and upped his target price to $207 from $192. “While all these actions should help units, we believe gross margins will come under more pressure.”
Long called Apple’s $4.99 monthly price point for the Apple TV+ video service “reasonable” given that the company has a limited library at the outset, especially relative to competitors like Walt Disney Co.’s DIS, +0.32% Disney+ and Netflix Inc. NFLX, +0.38% Apple is giving out a year of the service for free if users buy a new device, which Long expects will help the company amass a sizable base of subscribers at the