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Analysts worry that the price of the iPhone 5C is too high for emerging markets like China

Apple's big iPhone event Tuesday failed to impress analysts, and they made that point clear with four major downgrades.

JPMorgan Chase & Co., Bank of America Corp., UBS AG, and Credit Suisse Group AG all downgraded Apple after the reveal of its iPhone 5C and 5S on Tuesday. This sent Apple's shares down as much as 5 percent in premarket trading Wednesday morning.

A few specifics are Credit Suisse Group AG's downgrade from "Outperform" to "Neutral" and Bank of America's downgrade to "Neutral" from "Buy." 

According to the four major financial firms, the 5C wasn't priced low enough to grab its intended audience (which would be emerging markets). For instance, in China (which is one of the targeted markets), the 5C will sell for $730 because the country doesn't have subsidized phones. 

One good note on the China front, though, is that Chinese regulators gave the final required license for the iPhone to work on China Mobile Ltd's mobile network. This is a great new opportunity for Apple to expand its number of users, but the question still remains: will Chinese users want to pay that much for the iPhone?

In addition to 5C worries, analysts believe the 5S' specs don't seem to match those of competitors like Samsung in the high-end market.  

iPhone 5C

Analyst Kulbinder Garcha, who has a price target of $525 a share for Apple, predicts that Apple’s smartphone market share will drop to 15.5 percent this year and 13.1 percent next year. This is a far fall from 2012's 18.1 percent market share. 

Despite this hard hit from four major financial companies, Apple did at least see a few increases in price targets after the 5C/5S announcements. For instance, Nomura analyst Stuart Jeffrey increased his price target for the stock from $420 a share to $480, and Canaccord Genuity analysts increased their price target from $530 to $550 a share.

Apple's stock has taken a beating over the last year since it's high of $705 in September 2012. It fell as low as $398.05 a share back in June of this year due to concerns regarding whether Apple still had the ability to innovate like it did in the days of the 2007 iPhone release and the 2010 iPad release. Since the death of former Apple CEO Steve Jobs, Apple has only released new versions of the iPhone and iPad, and hasn't created any new, revolutionary products. 

Apple's stock is sitting around $467 as of noon today. 

Sources: Google Finance, ValueWalk, The Wall Street Journal

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RE: What did they expect?
By Argon18 on 9/11/2013 2:33:02 PM , Rating: -1
You've just described Microsoft Windows. Lol. No customization, you get what you get, just as Redmond has dictated.

iPhone doesn't need a back button like Android, as the "back" function is implemented on-screen in the iPhone menus.

RE: What did they expect?
By retrospooty on 9/11/2013 2:48:41 PM , Rating: 5
"You've just described Microsoft Windows. Lol. No customization, you get what you get, just as Redmond has dictated."

I have been customizing my Windows for years, I have no idea what you mean by that.

"iPhone doesn't need a back button like Android, as the "back" function is implemented on-screen in the iPhone menus."

It depends on the app. Some have it, some dont, some have it in a different spot. It's never consistent , that is the problem with it because it should be on the OS level, not app level.

RE: What did they expect?
By artemicion on 9/11/2013 6:08:39 PM , Rating: 3
Having gotten used to the "back" and "menu" buttons on my Note 2, I personally wish IOS devices had the same buttons, but I can't say Apple's design decision was a bad call.

Anecdotally, I know lots of less tech-savy Android owners who just don't "get" the "back" and "menu" buttons on their phones. I don't understand why, but for some reason it is just not intuitive for some people to grasp the fact that the "back" and "menu" buttons on their Android phones are universal, meaning that they have fairly predictably functionality regardless of what app you are in.

Also, even though the extra buttons on Androids for "back" and "menu" have the potential to create a more efficient experience on Android devices, it also leaves room for App developers to seriously F up the design of their apps. I have a bunch of terribly designed Android apps on my phone that have quirky implementation of the "back" and "menu" buttons. Navigating the ESPN Fantasy Football app is a pain on Android because it relies on unintuitive "back" button navigation/behavior (you never really know when you're at the top level menu, so a number of times i've hit "back" to try to get somewhere, only to get kicked out to the home screen). It also doesn't use the "menu" button at all, which is stupid. The IOS version of the same app doesn't have that problem because the navigation is done on screen.

RE: What did they expect?
By BSMonitor on 9/12/2013 9:40:26 AM , Rating: 1
So, the Android phanboy has extensive experience with iPhone Apps???

LMAO you are a trip.

RE: What did they expect?
By retrospooty on 9/12/2013 10:40:24 AM , Rating: 2
I have 2 iPad 4's on my desk as we speak, and just sent out an iPhone5 yesterday. I setup and play with all types of models on a daily basis as we send them out to our users. What of it?

RE: What did they expect?
By testerguy2 on 9/12/13, Rating: -1
RE: What did they expect?
By FITCamaro on 9/11/2013 2:57:09 PM , Rating: 5
What world do you live in that Windows can't be customized?

RE: What did they expect?
By Wererat on 9/11/2013 3:16:24 PM , Rating: 2
In this you couldn't be more wrong.

WP8 has a stunning level of customization; you can turn nearly every app into at least:
- A mere icon that launches the app; or
- A medium size icon/widget that displays some dynamic information; or
- A large icon/widget that displays detailed information.

App developers have the option to include two-tone displays that follow the user's color preferences or full-color iconography that doesn't.

That said, I think the 5c fails not because it's bad, but because its competition is at least equal and much less expensive. On the Android front, a Nexus 4 is ... $200 now? On the WP8 side, the Lumia 521 is $130. Both of these are off-contract prices. Apple has to compete against that; and the c doesn't. Apple's been there with Wow features (as in, "wow, nobody else has this") and these latest iterations ... well, hey, I can put my finger on the screen. Cool, but not Wow.

(Also, from a design perspective, the Nokia bright colors win over the 5c pale pastels.)

RE: What did they expect?
By tim851 on 9/11/13, Rating: 0
RE: What did they expect?
By inighthawki on 9/11/2013 5:46:20 PM , Rating: 2
The difference is that Android is so customizable that the experience across every phone is radically different. WP manages to have a high level of customizability but with the same core functionality. iOS is just bottom of the barrel at customization.

To say WP isn't very customizable would be ridiculously false, but I think we can agree that Android can go above and beyond. The real question is whether or not that is a good thing.

By StevoLincolnite on 9/11/2013 6:48:27 PM , Rating: 2
You can change the wallpapers on a Windows Phone 8 start screen.

You can also apply (with an App) a wallpaper over your tiles, which looks pretty freaking cool on my Lumia 920.

"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

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