AAPL Stock: 117.81 ( -0.22 )

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Apple shares slide over five percent on reaction to iPhone 5s, 5c

updated 12:36 pm EDT, Wed September 11, 2013

Key firms degrade AAPL from 'buy' to 'neutral'

Apple stock has dropped by over five percent -- or more than $26 per share -- in Wednesday trading so far, a reaction to yesterday's announcements of the iPhone 5s and 5c. Reactions appear to concentrate on the 5c, which some analysts had hoped would be priced $400 or less without a contract. Instead, even the cheapest 5c is $549 unlocked, only hitting its advertised $99 pricetag when linked to a two-year contract.

Several major firms -- Credit Suisse, Bank of America Merrill Lynch, and UBS -- have downgraded Apple from "buy" to "neutral." One of the exceptions is Canaccord Genuity, which has raised its price target from $530 to $550 on the strengths of the iPhone 5s. The 5s has features many Android phones don't, he notes, such as a fingerprint sensor, a motion coprocessor, and a 64-bit CPU. "We believe new capabilities in iOS 7 available Sept. 18 along with the features and new colors for the 5s and 5c should drive strong sales, particularly to Apple's large iOS base," he adds.

Although the 5c's pricing should keep Apple profit margins high, it poses an obstacle in markets like China and India. A 5c can cost as much or more than a person's monthly salary in those countries, making it unattractive next to Android devices, which can have many of the same features for $100-200 less.

by MacNN Staff



  1. gprovida

    Junior Member

    Joined: 02-14-06

    One of Job's big concerns on Macs and iPods was creating a price umbrella that competitors could leverage. It is unclear whether the current 5S and 5C prices are creating that situation. This does not mean that Apple is in a price war, in the case of Macs and iPods there was a clear quality difference that was meaningful to buyers, so does a $550 iPhone 5C have the quality build that is valued consistent with this price, that is unclear. Something closer to $450-$500 seemed right. But Apple knows who in China especially, they would market and perhaps in year 1 of China Mobile there is plenty of demand at this price and later years will see a price reduciton or a third phone added, like iPod Classic, Nano/Mini, and then Shuttle.

  1. hayesk

    Professional Poster

    Joined: 09-17-99

    Look back at any keynote. The stock always dips after a keynote. Buy on rumor, sell on news. The stock will recover in a few days. There's no point in searching for a reason.

  1. bigpoppa206

    Fresh-Faced Recruit

    Joined: 06-13-03

    hayesk, hear, hear!

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