The high price of the new so-called 'cheaper' iPhone addressed concerns about the company's gross margins. The issue though raised concerns as to the lack of aggression in its fight bring down the market domination of the Android operating system.
Apple's shares declined by nearly 5.6% at USD467.24 per share on Wednesday trading. This comes a day after the unveiling of the latest 5S, an iPhone with a fingerprint scanner as well as the 5C, the 'cheaper' model for emerging markets.
According to Credit Suisse analyst Kubinder Garcha in a note, "Rather than offer attractive pricing fr consumers and mive the iPhone 5C into a new an growing price segment, Apple retained a premium pricing strategy in targeting the USD400 to USD800 smartphone segment."
He added, "This segement is not forecast to see meaningful growth long term. This decision, at the margin, is good for profitability but not growth."
As for the 5C, the cost of each unit is RMB4,488 or USD730 per unit, which costs USD200 more compared to the unit cost in the United States.
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