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How to play Apple iPhone for the holidays: Analyst

Apple's iPhone 6 should mean a happy holiday season for one big-box electronics retailer, Piper Jaffray Senior Research Analyst Peter Keith said Wednesday.

Sales of the newest iPhone at Best Buy would be margin-diluted, he said. "But the kicker for Best Buy is that they get this fee from the carrier for signing up customers. So, they lose money on the hardware, but the sign-up fee, when you factor that in, it comes out about even with their corporate gross margin in the low 20s. If you can then sell an attachment, like a protective case where those margins can be 40, 50, 60 percent, then you're talking about a total basket that's accretive to margins."

On CNBC's "Fast Money," Keith said that he was originally expecting Best Buy same-store sales to rise between 1 percent and 2 percent in the third quarter, continuing into the fourth quarter.

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An Apple iPhone 6 Plus
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An Apple iPhone 6 Plus

"I think it's probably a little bit higher now that we've seen some of the higher price points and some of the higher storage options," he said. "It should be a nice traffic driver and good sales lift."

Keith has a "buy" recommendation on Best Buy stock and $34 price target.

But could consumer spending on the iPhone 6 and iPhone 6 Plus divert holiday cash from other areas?

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"It's entirely possible. The way that we look at it, this is largely going to be a refresh cycle," he said, citing a penetration of more than 50 percent for the smartphone market. "So, you're going to have people essentially buying this for themselves. We don't think it's going to be a huge giftable item."

Keith said that he expected iPhone sales to hit 24 million units into year end, accounting for about $6 billion in revenue.

"Overall holiday spending is about $600 billion," he added. "So, iPhone by itself we think is about 1 percent, probably not going to pull from other areas."