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Apple Inc. Message Board

  • sprabhakar sprabhakar Sep 11, 2013 8:55 PM Flag

    APPLE 5S and 5C pricing strategy very smart...most are missing it

    Most analysts seemed to compare Apple to Marie Antoniette who responded, when asked what the hungry poor should eat, "Let them eat cake."

    Apple's pricey 5C aimed at the Chinese peasants seemed to defy common sense for most analysts, including the undersigned.

    But, there could be a very smart angle to this. By pricing the 5C so close to 5S, Apple will, in the first six weeks, skim off the ready and willing to buy the 5S since there is hardly any price difference. Once this cream is in the bag, around November 15th, Apple will announce a 33% price cut for the 5C along with a deal to sell through China Mobile. That's when the stampede will begin.

    So, the pricing of 5C today is to prevent likely 5S buyers from opting to buy a 5C (because it is nearly the same in function #$%$ but would be a real steal if it was priced really low.)

    Sentiment: Strong Buy

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    • I do believe you have a point for the price cut in the future.

    • The answer is very simple 5C is not aimed at China at all.
      It is aimed at all markets. Last year people were buying a lot of 4S, instead of 5. That had lower margin. That sucked. This year Apple fixed it -- now 5C takes place of what last year was 4S instead of 5. But it is cheaper to make than 5, so the margin stays whether or not people by 5S or 5C. Genius!

      Sentiment: Buy

    • Actually when I saw the pricing. I said to myself, Cook wants to sell these in Apple stores to increase their in store iphone sales from 20% to their 50% goal. They will offer them through phone companies but use some sort of incentive program to bring customers into the stores such as Apple store gift cards. Send people home with more Apple products in their bags.

    • I also believe that price will be adjusted later along with a China Mobile deal announcement.
      Apple just has to make it in the emerging markets and $550 for a full priced phone is way too much.
      The good thing is that as you said they can always cut prices , so let's wait and see what happens.
      Once Apple announces that prices are cut to $399 on 5C then look out as everyone in China, India, Brasil would want that nice,shiny, cool looking iPhone.

      Sentiment: Strong Buy

    • If the 5C is set much lower than the 5S, it will cannibalize the sales of the 5S. They will be killing their revenue, and profit. Than the analysts could bash this to sub 400 come earnings time. Than the stock would decline much more. The public is a spoiled brat that can only see days ahead. They could always reduce the price if the 5C doesn't sell well. At least they have options versus dropping the price on the 5C two low than it will be called cheap immediately and there goes the brand name. The worse of both world. Why talk about anything if you can buy it cheap???

    • Or, the wholesale price given to the operators for a 5C must be significantly lower than that of a 5S, giving them a lot of flexibility to offer 'subsidies' on the 5C.

    • Not only that, it is a sign that China deal is close. I believe China Mobile is going to subsidize Iphone 5C. By pricing it high for unlocked, China mobile gains millions of subscribers by subsidizing.

    • The price drop won't be that much. I say a $50 Apple gift card.

    • yep... there is more to this pricing than we are seeing at this time. Easy to reduce price very hard to raise price.

      Sentiment: Strong Buy

    • Totally agree.

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