Yesterday, several months of frenzied speculation and Internet
rumors came to an end.
) introduced its newest two iPhones, the plastic iPhone 5C, which
will replace the iPhone 5, and the higher-end iPhone 5S.
Many bloggers and analysts had predicted that a budget iPhone
simply wouldn't happen, or else argued against the logic of
Cupertino taking that route. But the iPhone 5C is better described
as a cheaper -- rather than budget -- iPhone; the device, which
comes in yellow, blue, white, and red, will be available with a
two-year contract for $99 (16GB) or $199 (32GB), or unlocked for
$550 (16GB) or $650 (32GB). On the Apple Store's Chinese website,
the 5C is listed at RMB 4488, which equals $733 USD. That's
certainly not a budget iPhone targeted at emerging markets, as
early rumors had been suggesting.
The 5S, which Apple is calling its "most forward-thinking phone
yet," will feature a fingerprint scanner in the home button for
added security and convenience. Moreover, it will boast an
8-megapixel camera and brand new A7 chip, which makes the phone the
first ever to have a 64-bit desktop-class chip architecture. That
means the phone is going to be very, very fast. Available in the
much-rumored gold finish, as well as silver and "space gray," the
5S will be sold with a two-year contract for $199 (16GB), $299
(32GB), and $399 (64GB). Unlocked, the device will be sold for
$649, $749, and $849, respectively.
Following up on our story yesterday
that previewed the event
, four of Minyanville's finest tech-investing experts give their
insights on what to make of the new iPhones and Apple stock.
Solid, but Missing the Sizzle Factor
By Michael Comeau
I am very excited about upgrading to the iPhone 5S, specifically
for the enhanced camera. I was also impressed with the practicality
of the new feature additions like the touch fingerprint ID scanner,
and I like the look of iOS7 as a whole.
However, I'm not convinced it's going to excite the masses in any
big way as there just wasn't the sizzle factor of something like
Facetime. The 5S should sell well, but I just don't see it as a
pure game-changer the way something like the iPhone 4 was.
Overall, I'd rate the event a B.
Michael Comeau edits Minyanville's
Buzz & Banter
and is also a regular columnist on Minyanville.com, focusing on
technology and consumer stocks. Read more of his work for
Comeau has a position in AAPL.
Apple's Most Boring iPhone Event Ever
Fingerprint Tech Is a New Killer App
By Sean Udall
To me, there was really only one surprise: the fact that the iPhone
5C is a global phone and effectively replaces the iPhone 5. I had
thought this was going to be an emerging market phone only.
Oddly, the 5C phone isn't a much cheaper device, though I was never
in the camp that believed Apple would be making phones in the $300
to $350 price range with no subsidy. But the phone is still about
$100 more than I thought it was going to be. Everything else in the
announcement was incredibly well-telegraphed from all the
information we have received in recent weeks and from all the
supply chain leaks.
In my mind, these are the key takeaways and lingering questions
stemming from yesterday's event:
Udall has a position in AAPL.
Sean Udall is an investment strategist, portfolio manager, and
proprietary trader with extensive experience across a wide variety
of asset classes, including equities, fixed income, currencies, and
derivatives. He's a recognized trader, prolific writer, and the
founder of the
, a technology-focused investment newsletter from Minyanville. Read
more of Sean's commentary,
Apple May Be Missing an Opportunity Down the Food
By Justin Sharon
Do you remember the 21st night of September?
- Does the higher-than-expected price of the 5C imply that
China subsidies will actually be more in line with those of the
US and other developed markets? It seems that way, unless there
is a wholly new "surprise" device that we haven't seen yet.
- iPhone 5C margins look to me to be higher than the current
iPhone 5 margins, due to the cheaper materials used in
- I think the fingerprint tech is a new killer app for Apple
and a truly new innovation.
- I think this sets up a whole new and ripe monetization stream
for Apple -- mobile payments.
- As I've said before, iOS7 will be very well received and is a
- And iRadio is likely going to be a monster product as
Love was changing the mind of pretenders
While chasing the clouds away.
Not only did that siren song of the '70s from Earth, Wind &
Fire make an apparently eerily clairvoyant mention of cloud
computing, the date referenced in the ditty is a dagger to the
) investors everywhere. September 21 last year was indeed when the
stock hit an all-time high of $705.07, with any pretenders to
Apple's crown conspicuously absent. That its shares closed at a
mere $494.64 following Tuesday's much-trumpeted iPhone
announcement, even as the
S&P 500 Index
(INDEXSP:.INX) has soared in the interim 12 months, is indicative
of how far the firm has fallen from favor.
Can these new offerings give the company back its mojo in the face
of fierce competition from
(OTCMKTS:SSNLF) bigger-sized screens and
) Android operating system? Certainly, there are some compelling
features. The iPhone 5S boasts a better battery life, vastly
improved flash camera, and more powerful 64-bit processor. Above
all, its embedded fingerprint scanner is generating buzz, and noted
bull Brian White, Cantor Fitzgerald's analyst who last week
assigned a $777 price objective on the equity, promptly told CNBC
that this more expensive offering will be a "big hit."
Yet an equally big opportunity may have been missed further down
the food chain with the lower-end 5C. "Think different" is
spectacularly bad English, but it has historically been a
money-making mantra for Apple. Here, however, one is struck by how
little the phone's cost deviates from prior pricing strategies.
Absent a considerable carrier subsidy, which Apple has always
tended to shun, the device remains out of reach for untold millions
of potential customers in China and India, where the likes of
) already enjoy a considerable head start. The ongoing absence of a
larger screen only adds to the sense of disappointment.
The question of "WWJD?" (What Would Jobs Do?) has been one of
Silicon Valley's most popular parlor games this week. Apple's
legendary CEO famously favored quality over quantity, so a plethora
of plastic products, however colorful (see image), likely wouldn't
have been to his taste. He was, however, also an arch pragmatist
not above accepting a financial lifeline from lifelong nemesis Bill
Gates, so trying to decipher the intentions of an always-mercurial
man is ultimately a fool's errand.
Oh, "One more thing," as Steve so liked to say. Shares tumbled
after Tuesday's announcement, and opened sharply lower today after
a trio of equity analysts rushed to reduce their ratings. Yet
Beijing's year of the snake may yet have a twist in the tale.
Reports indicate that an agreement with
) is imminent. Apple has always laughed in the face of those who
make snap judgments, so how this story ends is still untold.
Justin Sharon authors Minyanville's stock upgrades and
downgrades articles every morning. He has extensive experience on
Wall Street, most recently at the Private Client unit of Merrill
Lynch. A 12-year spell in its research department encompassed the
eras of Blodget, boom, bust, and Bank of America. Read more of his
work for Minyanville,
Apple Is Still Apple
By AndrÃ© Mouton
I liked Apple's presentation, even if the market didn't. It was a
relief to see the unlocked iPhone 5C priced at $549, where it won't
cannibalize the high-end model. This won't do much to help Apple's
market share, but I'd rather see healthy margins than a race to
commoditize. Apple is still Apple -- and that's a good thing.
The feature upgrades on the iPhone 5S are a mixed bag. The 64-bit
processor seems like overkill for a 4-inch handset, although it
bodes well for the iPad. The camera improvements are nice, but they
would have benefited from an increase in disk space. The
fingerprint scanner could be a big deal if it cuts down on theft,
or gives a boost to personalized services like mobile payment
(although this wasn't mentioned in the presentation). All in all,
it wasn't an earthshaking update, but this reflects a maturing
industry more than any lack of innovation from Apple. The iPhone is
still best in breed, and I would expect solid sales of the new
model -- though perhaps not much growth.
If I have a complaint, it's Apple's decision to continue selling
the iPhone 4S. The choice of plastic for the 5C is understandable,
but it still feels like a downgrade. Consumers may choose to save
$100 and go with the 2011 model; it offers brushed metal and a more
professional look. Regardless, there's an aesthetic awkwardness to
the new lineup that's a little unusual to see coming out of
AndrÃ© Mouton is an independent investor who cut his teeth in
the dot-com crash and chewed his lip in the financial crisis. He is
a former writer for Offbeat Magazine in New Orleans and a touring
(but not itinerant) musician, who now lives in New York. Read more
of his work for Minyanville
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