Wall Street isn't very happy with Apple's new iPhones, and here's why!: Via iMore Blog

Just_Me_D

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Not surprising. They're not dissatisfied about the iPhone 5C or the iPhone 5S. They're ticked about what they perceive to be a missed profit opportunity. Unfortunately, too many people will only read the headline and assume they're technologically unhappy about the phones.
 

Jaguarr40

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Not surprising. They're not dissatisfied about the iPhone 5C or the iPhone 5S. They're ticked about what they perceive to be a missed profit opportunity. Unfortunately, too many people will only read the headline and assume they're technologically unhappy about the phones.
I have to strongly agree with this after reading the article myself.I don't think they perceive it, i think they know there is or could be lost profit and that hurts them personally.
 

sting7k

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Wall Street hasn't talked to all the owners of low end Android phones who want a better experience when they buy their next phone. They will not be buying a more expensive Android device due to cost. They might be willing to spend a little more than zero $ as well, maybe even $99. Guess what you can get for $99....
 

Fausty82

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Not surprising. They're not dissatisfied about the iPhone 5C or the iPhone 5S. They're ticked about what they perceive to be a missed profit opportunity. Unfortunately, too many people will only read the headline and assume they're technologically unhappy about the phones.

Gotta love the low information consumer.
 

Jaguarr40

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See something good actually does come out of Wall Street. It gets us talking about something that makes sense among us. It just doesn't make any sense to Wall Street and who they represent.
 

bunjy

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Wall Street hasn't talked to all the owners of low end Android phones who want a better experience when they buy their next phone. They will not be buying a more expensive Android device due to cost. They might be willing to spend a little more than zero $ as well, maybe even $99. Guess what you can get for $99....

I think a lot of people are missing the point. The fact is, consumers in emerging markets cannot afford the prices that Apple charges for its products, so the only economical choice they have is to buy low-end Android devices regardless of how crappy the user experience may be. Given the size of these markets, analysts are concerned that Apple is pricing itself out of these markets, therefore missing opportunities to grow its share abroad.

The counter-argument touched on in the article is that this is Apple's strategy. Apple may be perfectly content giving up this piece of this lower-end market (which is quite large) in exchange for dominance of the high end where it enjoys very high profit margins. This is a very common marketing decision that consumer product companies face. Obviously, Apple has executed this strategy very well, but analysts are concerned with how sustainable it is in the long run. Markets like China are hard for analysts to ignore.
 

LazyStarGazer

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Wall Street?
Oh, you mean those guys who've never understood Apple?
The people who see nothing but short term profit, like when they built Apple stock into a bubble, then caused it to drop so they could make millions in profit by playing off bizarre stock schemes?
The guys whose greed caused the recession?

$&%# what they think.

They should all be given lobotomies and be made to march off a cliff like human lemmings.
Not sure if they should be classed as parasites or predators, but they feed off the general population regardless.
 

Good OL MC

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Eh, they'll always be unhappy with something. A few months ago the margins weren't high enough because of the high mix of iPhone 4/4S being sold on contracts. Now they've presumably padded their margins by offering all the same price points, better or upgraded features that will help sell the devices, and done it while actually reducing the cost to make those devices by reducing storage and changing materials.

What a shame - Apple will probably make more money.

Is it important to hit the lower market? Yes - it can help drive more people in to the App Store and in to the services that will keep them buying Apple in the future. Will Apple ever address it properly? Who knows. As long as the profit keeps coming in it may be a while before we find out.


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George Jenkinson

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I think a lot of people are missing the point. The fact is, consumers in emerging markets cannot afford the prices that Apple charges for its products, so the only economical choice they have is to buy low-end Android devices regardless of how crappy the user experience may be. Given the size of these markets, analysts are concerned that Apple is pricing itself out of these markets, therefore missing opportunities to grow its share abroad.

The counter-argument touched on in the article is that this is Apple's strategy. Apple may be perfectly content giving up this piece of this lower-end market (which is quite large) in exchange for dominance of the high end where it enjoys very high profit margins. This is a very common marketing decision that consumer product companies face. Obviously, Apple has executed this strategy very well, but analysts are concerned with how sustainable it is in the long run. Markets like China are hard for analysts to ignore.

I wonder whether they downgrade Gucci shares just because they don't produce a cheap handbag for the same markets? One error with stockmarkets is, just like livestock (cattle) they have a herd mentality; they don't seem to think laterally....
 

sting7k

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I think a lot of people are missing the point. The fact is, consumers in emerging markets cannot afford the prices that Apple charges for its products, so the only economical choice they have is to buy low-end Android devices regardless of how crappy the user experience may be. Given the size of these markets, analysts are concerned that Apple is pricing itself out of these markets, therefore missing opportunities to grow its share abroad.

The counter-argument touched on in the article is that this is Apple's strategy. Apple may be perfectly content giving up this piece of this lower-end market (which is quite large) in exchange for dominance of the high end where it enjoys very high profit margins. This is a very common marketing decision that consumer product companies face. Obviously, Apple has executed this strategy very well, but analysts are concerned with how sustainable it is in the long run. Markets like China are hard for analysts to ignore.

You just laid out both arguments. I think it's pretty clear what market Apple is after. The people buying low end Android devices in emerging markets also aren't going to be buying accessories, apps, music, movies, TV shows, etc. Not a very attractive market for a company like Apple who makes all their money selling products. Your second paragraph is spot on.

Like I said. The "analysts" have not spoken to all the burned users of low end Android phones in the mature markets. People who are price aware but still willing to spend some amount of money. Those people are going to be coming up for contract renewals at some point. There is also still a huge amount of people without a smart phone. They may finally jump in with the 4S or 5C.

Emerging markets won't work for Apple. Google sells ads. Ad revenue is dependent on the number of eyeballs that view the ad only. Not how much money is in a user's pocket. You think the margin on iPhones is high...the margin on accessories and cables that Apple sells has to be even higher. They need to sell "stuff" to make money. Not just put cheap devices in as many hands as possible to show ads. It's a completely different business.
 

anon(4698833)

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I think next year I'm going to post up at the NYSE and start telling people what's going to happen...and then I could make money because people will think I know the future! (when in reality I'm just going by what happens every...single...year).

And the ridiculous notion that Apple needs to start focusing on emerging (low end) markets is like saying Mercedes needs to focus on such. Give me a break...Android sells junk class phones that more than satisfy that market, if people want an iPhone, but have pre-paid junk phone money, welllll...just like if a person wants a benz, but has Honda Civic money...you know where this is going.
 

cardfan

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If they haven't caught on yet, I'm sure the October financial results will be fun to watch as Apple explains it to them.
 

bunjy

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I don't believe Apple should sell "junk" phones or play at the low end of the market. But I promise you that Apple is focusing internally on emerging markets and the analysts expect them to. As a business, Apple would be crazy not to think about how it wants to position itselft in emgerging markets. By definition, an emerging market "is a nation with social or business activity in the process of rapid growth and industrialization." Apple wants to be part of this growth trend, it's just evident that the 5c is not positioned well at the price point necessary right now and that concerns some analysts.

As mentioned earlier, I laid out both arguments because there is validity to both arguments. People here may think business analysts are "stupid", but they tend to take a more dispassionate, data-driven view than us Apple enthusiasts.
 

cardfan

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iPhone 5C preorders to total 1M in first day - analyst | Apple - CNET News

First day of presales look to be about half of the iphone 5 last year. That's pretty amazing considering the 5C is ..the iphone 5 with cheaper materials. Considering early adopters or the more techie inclined tend to preorder, this is good news because the 5C is aimed (or would seem to appeal more) at the vast mainstream nontechies who aren't early adopters.
 

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