Apple Shares Down More Than Five Percent Following New iPhone Event
Investors expecting that the pair of new iPhones Apple introduced Tuesday would send the company’s stock headed back toward the $700 record highs it was charting this time had their hopes dashed Wednesday morning when it fell instead.
Shares of Apple fell more than five percent in early morning trading Wednesday, taking about $20 billion in market value along with them. Dragging them down: Concerns that the price of the iPhone 5c — the long-rumored lower-cost iPhone — is far too high. As BTIG analyst Walter Piecyk said today, “The pricing on the iPhone 5c is simply not low enough to adequately address the significant global growth opportunity that we believe exists with unsubsidized prepaid customers that have not yet bought a smartphone.”
At $549 without a contract, the device is significantly more expensive than even the ceiling of the $400 to $500 price range the market had been expecting. Indeed, iPhone 5c is essentially priced according to the same pricing scheme Apple has been following for years.
And for investors convinced this was the year the company would aggressively target customers in emerging and prepaid markets with a more inexpensive iPhone, that’s a clear disappointment.
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