Iphone 5s and 5c

These are some recent facts regarding Apple:

  • With the release of the new iPhones, the budget brand has seen Apple’s shares plummet. More than $30bn has been wiped off the value of the company and Apple’s shares have fallen by 6% with at least four banks downgrading their recommendations on the stock, marking Apple to neutral.
  • Investors had believed Apple was set for a high take on China and emerging markets, but the unexpected high price of the 5C will mean that many Chinese and worldwide smartphone consumers will not be able to purchase it.
  • There is only an £80 difference between the high end 5s (£549) and the colourful budget version, 5c (£469).
  • The lack of a distribution deal with China Mobile, the world’s largest mobile phone network thanks to its many domestic customers, also caused consternation.
  • Apple will now face even higher competition with the Android ecosystem. If people want a cheaper version of the iPhone, the discontinued 5 means they will have to buy the 4s; released 2 years ago with camera and processing power are inferior to those of cheaper models by other brands (ie. Samsung).
  • It is estimated that Apple’s smartphone market share could fall to 13% globally next year from 18%
  • UBS reduced estimates for iPhone sales, saying the company would ship 158m units, compared to a previous estimate of 175m units. However, not all commentators were downbeat. Four banks raised their price targets on Apple’s shares, including Nomura, which revised its bet on the share price from $420 to $480, according to Reuters.
     

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Think about the implications for brand loyalty and product differentiation.

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