Apple (AAPL) iPhone 5C Demand Soft in China - Cantor

October 9, 2013 7:55 AM EDT
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Apple's (NASDAQ: AAPL) lower cost iPhone 5C is seeing less than enthusiastic demand in China, thinks Cantor Fitzgerald Brian White, citing sources. Softness in China is tied to the high price.

"Our meeting with a tech supply chain company highlighted an inline ramp of components in 3Q:13 that we believe includes those used in the iPhone 5C; however, our contact indicated that the feedback around demand for the iPhone 5C has been soft," said White.

White's contact believes orders for the iPhone 5C are at risk of being reduced in the future, though no adjustments have been made yet.

"In our view, we believe there is a big market opportunity for the iPhone 5C; however, we also believe Apple could better penetrate this market by offering the iPhone 5C at a more favorable price point, and this is especially true in developing countries such as China. During our visit to Apple stores and resellers this week in China, we have found that there is healthy interest in the iPhone 5C; however, we believe this has not yet translated into exciting volume levels in China," said the analyst.

Sources told White price point needs to come down to a range of US$325-$405 to find meaningful volume levels in China.

Cantor Fitzgerald has a Buy rating on Apple with a price target of $777.00

For an analyst ratings summary and ratings history on Apple (NASDAQ: AAPL) click here. For more ratings news on Apple click here.

Shares of Apple closed at $480.94 yesterday.

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