Wall Street Jeers Apple's (AAPL) iPhone 5C Pricing
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Today's Overall Ratings:
Up: 9 | Down: 6 | New: 4
Rating Summary:
39 Buy, 25 Hold, 7 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 9 | Down: 6 | New: 4
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Shares of Apple, Inc. (NASDAQ: AAPL) are getting lambasted one day after the iPhone 5S and 5C unveiling, as Wall Street analysts show clear disappointment with the iPhone 5C pricing and a China Mobile announcement remains elusive.
With its iPhone event Tuesday, Apple said a subsidized iPhone 5C will run $99, while an unsubsidized 5C will cost $549. The pricing suggests that Apple is protecting margins at the expense of market share.
The 5C pricing was a "key disappointment," according to Goldman Sachs analyst Bill Shope and "is likely to remain an overhang until details on post-paid pricing in emerging markets emerge in coming days and weeks."
Deutsche Bank analyst Chris Whitmore was expecting a price of around $400 for an unlocked 5C.
The 5C pricing still leaves Apple with a product gap in the low-end, Jefferies analyst Peter Misek commented.
The iPhone 5S got much better reviews by analysts. FBR Capital analyst Scott Thompson said "new features, such as a faster processor, better camera features, motion sensor, and fingerprint sensor, could be meaningful upgrades."
All told, Apple was downgraded by three Wall Street firms on Wednesday (UBS, BofA/ML and Credit Suisse). On the other side of the trade, at least four others raised their price targets (FBR, Lazard, Nomura, Canaccord Genuity).
With no China Mobile deal announced overnight, some Apple investors are getting nervous. Shope said if a China Mobile confirmation doesn't come in short order it will limit the unit upside they had anticipated.
Still, many see a deal with the 700+ million wireless customer giant as "imminent." Whitmore cited the fact that both the iPhone 5C and 5S support TD-LTE. Others are pointing to news this morning that China's Telecom Equipment Certification Center granted Apple a "network access license" for a handset to run on China Mobile's network standards for third- and fourth-generation cell services.
Shares of Apple are down 4.2 percent to $473.63 in pre-open trading Wednesday.
With its iPhone event Tuesday, Apple said a subsidized iPhone 5C will run $99, while an unsubsidized 5C will cost $549. The pricing suggests that Apple is protecting margins at the expense of market share.
The 5C pricing was a "key disappointment," according to Goldman Sachs analyst Bill Shope and "is likely to remain an overhang until details on post-paid pricing in emerging markets emerge in coming days and weeks."
Deutsche Bank analyst Chris Whitmore was expecting a price of around $400 for an unlocked 5C.
The 5C pricing still leaves Apple with a product gap in the low-end, Jefferies analyst Peter Misek commented.
The iPhone 5S got much better reviews by analysts. FBR Capital analyst Scott Thompson said "new features, such as a faster processor, better camera features, motion sensor, and fingerprint sensor, could be meaningful upgrades."
All told, Apple was downgraded by three Wall Street firms on Wednesday (UBS, BofA/ML and Credit Suisse). On the other side of the trade, at least four others raised their price targets (FBR, Lazard, Nomura, Canaccord Genuity).
With no China Mobile deal announced overnight, some Apple investors are getting nervous. Shope said if a China Mobile confirmation doesn't come in short order it will limit the unit upside they had anticipated.
Still, many see a deal with the 700+ million wireless customer giant as "imminent." Whitmore cited the fact that both the iPhone 5C and 5S support TD-LTE. Others are pointing to news this morning that China's Telecom Equipment Certification Center granted Apple a "network access license" for a handset to run on China Mobile's network standards for third- and fourth-generation cell services.
Shares of Apple are down 4.2 percent to $473.63 in pre-open trading Wednesday.
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