Apple’s shares fell more than 5 per cent on Wednesday, following the launch of its new iPhone 5S and iPhone 5C.
The share price ended at a one-month low of $467.24 at midday after at least three brokerages downgraded the stock.
It is thought that investors were put off by the price of the handsets, especially the so-called ‘cheap’ iPhone 5C which starts at £469, claiming they weren’t low enough for Apple to attract new customers, especially in emerging markets such as China.
The iPhone 5S is a high-end successor to the current iPhone 5 model and comes in gold, silver and slate, with a fingerprint scanner built into the ‘home’ button and starts at £549.
Is Apple’s design team giving up much, in terms of the 5C’s aesthetics? Plastic is cheap, but it also feels cheap, right? Well, that depends on the quality of the plastic, but more crucially, the injection molding process. In this area, Apple is world class. Just look at the quality of the plastic housing on Apple TV, AirPort routers, or the EarPods.
The covers look garish. It will take people back to 10 years ago
China ignores this iPhone
Around a third of the world’s handsets are sold in China to half a billion people, yet only 12 per cent of these phones are made by Apple.
Apple is still a popular choice in China, but predominantly with the Chinese elite, and Carl Howe, vice president of Yankee Group’s Consumer Research group told ABC News: ‘Rumor has [Apple] that they make more money in any of the five stores in China than they do in the Fifth Avenue store in New York.’
‘Investors were put off that Apple’s price point didn’t go low enough to attract a new market. It doesn’t have the same range in price that Apple’s competitors have
Apple recently lost smartphone market share to main rival Samsung, dropping to 14 per cent – its lowest for three years – because of ‘lacklustre’ iPhone 5 sales and tougher competition from rivals.
Analysts predicted that Apple would be looking to boost sales in emerging markets, such as China, and this was bolstered by the fact Apple held a mirror event in Beijing, and announced the iPhone 5S will also be made available in China at the same time as other countries for the first time ever.
UBS, which cut its rating on Apple’s stock to ‘neutral’ from ‘buy,’ cited a survey of 35,000 Chinese consumers conducted by ChinaDaily.com that found only 2.6 per cent of respondents would consider buying the cheaper iPhone 5C.
Last year, eager buyers in Beijing waited overnight in freezing weather to buy the iPhone 4S. Pressure to get it, and the profit to be made by reselling scarce phones, prompted some to pelt the store with eggs when Apple, worried about the size of the crowd, postponed opening.
Just 18 months later, many Chinese gadget lovers responded with a shrug this week when Apple Inc. unveiled two new versions of the iPhone 5. Today’s market is glutted with alternatives from Samsung to bargain-priced local brands.
That lackluster reception suggests Apple faces a struggle in defending its shrinking share of China’s crowded, increasingly competitive Smartphone market and its premium prices.
That matters, because China is a key part of Apple’s growth plans. CEO Tim Cook told the official Xinhua News Agency in January he expects this country to pass the United States as its biggest market.
People were expecting a much cheaper version to expand the market to the mid-tier segment. But that didn’t happen,” said analyst C.K. Lu of Gartner Inc. “We don’t see much is going on in the China market with this new product launch.”
If we see cost is Rupee 40K plus .Screen size is 4inches only Camera is poor resolution Poor video recording .Screen resolution is 730 pixel, Even informed is 1080 Applications are far less then today’s smart phones .No wonder iPhones are fast losing market share .There are much better option largest screen better screen resolution camera .Much better applications .How long name can sell? They have to change otherwise will be out.
Apple’s share of smartphone market by volume is less than 2% in India
“The two new iPhones will attract a niche audience like affluent youngsters and die-hard Apple fans as they are priced high and come in different colours,” said Himanshu Chakrawarti, CEO of Mobile Store.
India has not been a critical market for Apple as majority of the smartphones sold in the country fall in the . 7,000-12,000 price range.
Telecom analysts and retailers said the iPhone 5S and 5C are priced much higher than they expected and are unlikely to find many takers here even as thousands of mobile users migrate from basic handsets to smartphones each day.
Chakrawarti said he expects the iPhone 5S, which comes with a built-in finger-print scanner, to be priced between . 45,000 and . 50,000. The 5C, he said, could be sold between . 35,000 and . 40,000. The iPhone 5 is sold in India for around . 45,000.
An Apple India spokesman said the company has not yet decided on the price of the devices or when they will be launched here. Over the past few quarters, Apple has been losing market share outside the US with firsttime smartphone buyers in countries such as India, Brazil and Indonesia opting for Samsung and other cheaper handsets running on Google’s Android software.
“Android is growing crazy, but Nokia is being sold and HTC is on crutches, so Samsung is its only serious rival. That will let Apple play in the niche category it falls into as of now,”.