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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 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.


"Nowadays, security guys break the Mac every single day. Every single day, they come out with a total exploit, your machine can be taken over totally. I dare anybody to do that once a month on the Windows machine." -- Bill Gates














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