Nearly everyone was expecting iPhone 5C to be the cost effective device to compete in the emerging markets like China. Wall Street was disappointed when it learned the off-contract pricing: $550 to start with. It's even more disappointed when the two current Chinese carriers offer iPhone 5C at RMB 4488 (about $730), and there was no China Mobile deal.
Analysts downgrades followed. AAPL was down 5.5% following a 2% decrease. iCahn swooped in to buy more.
The market was obsessed with market share, even though Apple's ecosystem continues to grow. Apple's share has been shrinking because the low end has been growing like weeds at zero profit. This is mostly because of the aggressive strategies from Samsung, Lenovo, Xiaomi, enabled by the free Android OS. Most analysts were expecting Apple to join the cut-throat "pissing" contest at the low end.
Well, Apple appeared to have refused the temptation. It chose to stay at the high end, even in China. That doesn't mean the prices for iPhone 5C won't come down. I think between subsidies and discounts, the effective prices for iPhone 5C would come down quite dramatically in China over the next couple of quarters. But that probably won't happen until iPhone 5S has gone on sale for some time.
5S is where the market should focus on. It's the new frontier of the smart phone.
"Most forward-thinking."
"Desk-top class" architecture with 64-bit A7 chip.
What do they all imply?
Here are some good discussions, among all the noise:
Apple positions itself for the coming convergence of mobile and desktop.
2015: 64-bit ARM chips in iPhone 5S serve up taste of Intel-free future for Apple.
The iPhone 5S-Class.
iPhone 5C pricing makes perfect sense.
(a balanced take after the 10% dive)
The iPhone 5C: Cheap Plastic Case, Not a Cheap Price — and That’s the Point.
(Interview with Cook, Ive, Federighi)We're not in the junk business.
Ticket to the next generation of the internet.
Apple tops Google and Coke in brand valuation.
The market impact of 64-bit A7.
iPhone 5C is great marketing for 5S.
