Wall Street has seen Apple’s lower cost answer to Android’s growing global market share, and the pin-striped cufflinked penny-loafered class doesn’t like it.
Not one bit.
Apple’s first-ever dual-pronged iPhone strategy with a new iPhone 5S and a new iPhone 5C is intended to provide some differentiation in a maturing smartphone market, as well as capture a larger slice of consumers with a wider price band. That band, however, doesn’t appear to be wide enough for the stockbrokers and fund managers of the world.
Apple stock dropped today from just under $500 to $467 as of this morning. That is still significantly up since this summer, since APPL had jumped from $393 in June to a high of $506 just a few days ago, as investors saw strong profit growth in Cupertino in spite of lagging market share. But analysts had hoped for an iPhone 5C in the $400 range, instead of the $549 no-contract price it actually came in at.
And that price means the so-called cheaper iPhone is not very cheap at all, particularly if you live in China, India, or Africa.
Whether that’s good or not depends on what you believe about Apple, its place in the market, and where its phones live in the overall smartphone market. But it’s certainly something many of the Chinese are not happy about.
And, clearly, Wall Street.
“The lower-end iPhone is to address price competition in an increasingly commoditizing market,” says Ronald Klingebiel, professor of strategy at the Warwick Business School. “But the likes of Lenovo and ZTE achieve sufficient quality at much lower cost.”
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