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Apple Inc. Message Board

  • senspeed senspeed Dec 7, 2012 3:16 PM Flag

    Subsidies Just Wont work for iPhones anymore

    "Imagine what will happen if subsidies go away and consumers have to pay $700 to $1000 for an iPhone. My own research at The Arora Report shows that in such a scenario, Apple may easily lose over 50% of its sales of iPhones. Considering that Apple derives over 70% of its profits from iPhones, such a scenario will be a virtual death knell. My research shows that Apple is more dependent on subsidies than its competitors." - Forbes

    Apple's model worked when it had an innovating phone. It has since fell way behind in innovation and it is a matter of time before Apple needs to adjust. Adjusting will be extremely painful for profits. Given this, I see his stock at $450.

    Sentiment: Sell

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