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Why Hasn't Apple Made This Margin-Boosting Move Yet?

By Evan Niu, CFA - Apr 16, 2013 at 5:12PM

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Apple should implement a strategy in its iDevice lineup similar to its Mac lineup, where the company adds beefier components for a hefty fee. That could give margins a boost, since Apple excels at the upsell.

Apple (AAPL 2.54%) upsells commoditized components better than anyone. In its iDevice lineup, the company charges $100 for incremental levels of additional storage, most of which goes straight to margins. In its Mac lineup, Apple does upsell Intel (INTC 3.06%) processors in Macs, typically for $200 to $300. Again, most of that price increase goes to pad margins since Intel's processor prices don't climb that dramatically. 

In the video below, Fool contributor Evan Niu, CFA, explains why he thinks Apple should pursue this margin-boosting strategy.

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