Wall Street Is Unimpressed With Apple’s 'Nobody’s Low-Margin' iPhone 5c
September 11, 2013
The introduction of the iPhone 5c is having a negative affect on Wall Street. Since Apple concluded its iPhone event on Tuesday, the company’s stock price is down nearly 8 percent.
The reason for the fall in Apple’s share price is being attributed to the higher-than-expected price the company is charging for the iPhone 5c, according to Reuters.
For months, analysts noted that Apple was introducing the iPhone 5c as a low cost alternative to their flagship model, which is now the iPhone 5s. In particular, the iPhone 5c was expected to appeal to the Chinese market, which has been bombarded in recent years by less expensive smartphones.
It appears that Apple went in another direction. The 16GB iPhone 5c is just $99 in the United States. In China, it is almost $200 more.
As Sanford C. Bernstein analysts said in a note:
...We worry that Apple's inability/unwillingness to come out with a low-priced offering for emerging markets nearly ensures that the company will continue to be an overall share loser in the smartphone market until it choses to address the low end.Meanwhile, Cowen and Company analyst Timothy Arcuri concludes that the iPhone 5c is “nobody’s low-margin phone.” This begs the question; why exactly did Apple announce the iPhone 5c? For the fancy colors? Preorders for the iPhone 5c commence on Friday, Sept. 13. The handset launches one week later, along with the iPhone 5s in the United States, Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, and the United Kingdom. See also: In China, The iPhone 4 Is Apple's True Low-Cost Handset, Apple's New iPhones Support China Mobile's TD-LTE Band, and Apple Posts iPhone 5C And iPhone 5S Introductory Videos On YouTube.
