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Why Apple’s big gamble may work

Talking Numbers

Will a cheaper price point come at a high price for the Apple brand?

Apple fans waited a long time for new products from their favorite company. What they got… was exactly what was expected – a couple of new iPhone models but nothing earth-shattering.

The new, 32GB iPhone 5S is the more expensive of the two, costing $199 and featuring a fingerprint-based security app. The cheaper, 16GB multi-colored iPhone 5C is expected to retail for $99. If you don’t want a contract, unlocked versions of the phone cost $549.

(Read: Apple live blog: Here comes the iPhone 5S)

The market was unimpressed with Apple’s offerings. The stock closed the day down 2.3% from the day before.

Yet Apple’s true target was perhaps not the market so much as it was China. Apple is losing ground to lower-priced Android-based Samsung smartphones in China. Samsung sells about 19% of the smartphones in the world’s largest cellphone market compared to Apple’s 4%.

But will a cheaper price point come at a high price for the Apple brand? And, as Apple charges less for new phones, will that eat into Apple ample gross profit margins, currently near 37%?

(Read: Why 'device exhaustion' spells trouble for Apple)

To help answer these questions, Talking Numbers turned to CNBC contributor Gina Sanchez, founder of Chantico Global, who looks at Apple’s fundamentals. To see if the charts agree with Sanchez’s assessment, Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, looks at Apple’s charts.

To see what Sanchez and Ross think is next for Apple, watch the video above.

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