Has Apple Put the Cart Before the Horse With its New 5S?

A day after Apple unveiled the 5S, a high-end iPhone for the emerging markets its shares were down about 3 percent. Does this mean the company is on shaky grounds? Should this reaction be seen as an early warning of sorts? Were does Apple go from here?

 

Yes, the much talked about cheap iPhones from Apple has turned out to be a damp squib. The possible fallouts of this failure is many but it is now apparent that Apple’s ability to fight against Google Inc's market-dominating Android operating system is now under a big question mark. The first and foremost implication of this inability is that Apple will continue to be an overall share loser in the Smartphone market. The company has squandered a golden chance and competitors like Samsung will lose no time to push in its own products and fill in the vacuum. 

 

 

Many analysts are of the view that Apple AAPL has chosen to tread along the wrong path. The prevalent opinion is that the company had a fantastic chance of moving the iPhone 5c into a growing price segment. Instead Apple chose a segment that is unlikely to see meaningful growth. The company played it safe in terms of profitability but overlooked fabulous growth opportunities. For a company which has seen more of profitability, foregoing it once to breach into newer segments would have made lot more sense. A look at the performance of its stocks justifies the sentiments. Interestingly, both BofA Merrill Lynch and Credit Suisse have downgraded Apple's stock from "buy" and "outperform" to "neutral".

 

 

 

Its steep price notwithstanding, the phone would find many takers, because of its solid make, say enthusiasts. The biggest achievement for Apple, they believe, is that it has not deviated from delivering an elegant design even at a cheaper price. The plastic phone comes with a steel feel and has a seamless appearance.

 

All said and done, a mere $100 price difference between the iPhone 5c and the iPhone 5s, makes one wonder about the need to launch iPhone 5c at all. Let’s keep our fingers crossed over how the market reacts.