Wow, investors in
) stock sure are a wussy bunch all of a sudden.
Monday's world-shattering news was, literally, no news. That is,
there was no word from Cupertino on the number of online pre-orders
received over the weekend from US consumers for the newly-announced
Also, there was one tidbit of possible news. That is, the
Wall Street Journal
appeared to be offering
a smaller subsidy for the iPhone 5S than for the previous model.
Result: Apple stock dropped another 3.07%, to $447.06 at the market
close, making it the worst-performing stock of the day on the
That brings the stock's total losses to about 10% since last week's
announcement of two new phone models, the lower-priced 5C and the
5S. The latter is not available for pre-orders in the US until
Apparently, investors got in a tizzy because Apple has publicized
its pre-orders for every introduction since the first iPhone in
2009, and every succeeding announcement reported a total sellout
and a doubling of orders from the previous model.
So, no news is bad news, maybe. Or, possibly, the company finally
anticipated demand accurately. Even more likely, the company
expects, and even hopes, the cheaper 5C model will sell only
moderately in the US, since it is counting on the usual huge sales
for the more expensive iPhone 5S, beginning this Friday.
The low-end model, after all, is supposed to be aimed at emerging
markets, where consumers are far more price-sensitive than in the
US. And that might take the sting out of the report from China
saying that the expensive model could get a less-generous subsidy
than its predecessor.
Since 2007, it has seemed that Apple could do no wrong, in the eyes
of investors. And now, suddenly, it can do no right.
Worse, that attitude has now spread beyond the personal tech and
financial media and is moving into the public consciousness. For
proof, see this compilation of
late-night jokes, online satires, and plain
about Apple's latest product announcements, from Investors.com.
But Apple has its defenders, on both the 5C and the 5S. Here are
three major points they're making.
1. There's Room at the Top for Apple
The iPhone 5C is apparently Apple's take on a lower-priced,
entry-level product for emerging markets. But at $549 in the US,
and as much as $733 in China, critics say it misses the
Analysts generally cite about $400 as the upper limit for emerging
, a partner at Allegis Capital, argues that those who are demanding
a low-priced product from Apple don't understanding the company or
(ETR:BMW) resurrected the Mini Cooper brand, Gassee says, it wasn't
trying to compete with the
The tiny Tata Nano, made in India, has been a huge success with
people trading up -- from a motorbike. At about $3,000, it's the
world's cheapest car model.
Plenty of other products can be purchased in a wide range of
prices. Gassee makes the point that consumer technology has room
for a luxury brand, but somehow has gotten stuck in a race to the
2. Apple Isn't Totally Oblivious to Price
Among the harshest of Apple's current critics is Henry Blodget, who
writes at BusinessInsider.com that he's a loyal customer and
shareholder but thinks that Apple "is
letting its obsession
with short-term profits blind it to the current realities in the
He'll be glad to hear this news: Apple will leave its pricing to
distributors in India unchanged at 2012 levels, despite the 14%
plunge in the value of the rupee so far this year.
the report in Bloomberg
(OTCMKTS:SSNLF), currently the largest phone brand in India, has
raised its prices.
India is the world's fastest growing smartphone market.
3. The iPhone Is Practically Free Here
What a country!
For all the talk of the high cost of the iPhone 5C and the iPhone
5S, a flurry of new offers makes it clear that most Americans will
be able to get one practically free or very cheap.
"Practically free or very cheap," meaning, well, not really. They
can trade in an old iPhone, or swap another brand for an iPhone, or
dump their current carrier, in order to get a new iPhone for very
little up front, along with a new two-year contract with the
The best deals for consumers might be for leftover Apple 5 models.
Although discontinued, they have virtually the same specs as the
new 5C model.
But in all of the above cases, no matter how good a deal the
consumer gets, Apple gets its full price.
And that's a pretty positive comment about Apple.
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