To say that Wall Street is unhappy with Apple would be an understatement. When the company announced their new iPhone 5C, a cheaper and fully functioning version of the iPhone that was meant for infiltrating the lower-end Smartphone market, investors were expected just that. However, when the new iPhone hit the shelves, it was “cheaply” priced at $549 for off-contract consumers. That’s not cheap.
Due to Wall Street’s disappointment, Apple’s shares have dropped by more than 3% since the phone’s release. The whole idea behind the release of this phone was to entice the lower income Apple consumer’s to invest in an iPhone. However, by pricing the iPhone 5C so high, customer’s are essentially financing their phone for two or more years which may even be longer than they even have the phone.
Credit Suisse, a Switzerland based, multinational financial services holding company commented, “So much for low end,” in a report by the Wall Street Journal, “We remain disappointed with Apple’s decision to remain a premium priced Smartphone vendor, and this continues to competitively expose the company.”
According to another stock holder with Apple, the Director for Consumer Electronics and Communications Technologies at IHS, “In light of this pricing, the 5C appears to be a mid-range product that cannot significantly expand the available market for the iPhone line to lower-income buyers. As a result, the arrival of the 5C will not spur a major increase in iPhone sales in the second half of 2013 compared to previous expectations.”
Needless to say, consumers and investors are beginning to question Apple’s ability to innovate and penetrate other growth opportunities, especially after the iPhone 5C bust.
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