Apple shares have broken higher from a recent range, with the latest announcement being a buy-now-pay-later (BNPL) scheme for its products.
AAPL – Weekly Chart
Apple will offer consumers the option to take a loan for $50-1,000 and pay over six weeks. Analysts have been looking for different payment options to add further revenues to the company.
AAPL has now broken above the resistance at $157.50 and could head for the $165 level before a push to $175.
Apple’s products have long had a higher ticket price than some of its rivals and may see new consumers coming on board.
Apple Introduces Flexible Payment Options
The BNPL option was first announced a year ago at its WDC conference last year. It will launch with a pre-release version before being open to all consumers later in the year. At its upcoming conference in June, we may get more announcements concerning the release of its anticipated virtual reality headset.
Another payment option was considered with a hardware subscription service. The new headset was rumoured to cost around $2499, and the company will need to support customers if they want to see strong demand for the product. The BNPL trend has become popular in the tech industry. The Affirm company is partnering with American Airlines on a “fly now, pay later” service. Challenger banks also want to join the BNPL movement to fight off loan competition.
Apple was recently the subject of a $199 price target from investment bank Goldman Sachs. “We are Buy rated on AAPL as we believe the market’s focus on slower product revenue growth masks the strength of the Apple ecosystem and associated revenue durability and visibility,” said Goldman’s analyst Michael Ng.
“Apple’s success in premier hardware design and resulting brand loyalty has led to a growing installed base of users,” said Ng.
The company can further support brand loyalty with its BNPL payment option as its products remain in demand worldwide. Apple has not received a buy rating from Goldman in six years and has risen 300% since then.
