Just watched Henry Blodget applauding the move in an interview. To his credit, he had previously said that Apple should do something with their $121 billion cash hoard and that was his suggestion; to compete in lower-cost markets, even though it would mean margin compression.
Interestingly, Nokia, the company that no one wants to talk about, is very experienced in this space. Witness the phones in their Asha line. Also, witness the Lumia 620, a beautiful version of the phone which is available at a very reasonable price even without a contract.
Until now, the basic concept has been NOK desperately trying to compete against AAPL, in the premium-priced smartphone space. Now, the tables are turning and AAPL is going to try to compete in a space NOK is already experienced in; moderate-cost smartphones for the rest of the world.
I totally agree. People buy the iPhone for exclusivity. Apple needs to raise the bar and release a $1,000 iPhone Ultra to maintain that exclusivity cause too many people have an iPhone and for the low end they need something with a totally different brand as to not cheapen the brand and reputation. When I see Joe Schmoe holding a new iPhone I almost wanna get rid if mine. I would totally pay $1,000 for a higher end iPhone if it meant exclusivity and if course better hardware and design. The way apple is headed its not gonna end well. I'm shocked they didn't try to buy Nokia when it was dirt cheap. That's what happens when you give the number 1 job to some gay dude.
He just can't make the right "choices".
Sentiment: Strong Buy
I just don't think apple can switch to a high volume producer. It is a totally different business. Besides destroying their high end overnight, this is a path to ruin for them. It is backwards and desperate. The only way it makes sense is because they realize that NOKIA LUMIA is the new high end smart phone and they are giving up.
Maybe they should try paying a 5% div to their shareholders first.
sooner than later.
Next time pay attention. That is what happens when you have cash sitting around doing NOTHING.
Europeans are not THAT arrogant. Don't expect NOK to make the same mistake.
You are just getting played by the shorts.
No doubt, I think this makes them look desperate. Reminds me so much of RIM and how they were so smug and slow to react to the retail customers. Apple's extreme hubris about not catering to the low end segment makes them look ridiculous now they realize the proletarian's are essential for their long term growth.
I hope people leave enmass over the next year or two... And of course buy a Lumia or a lovely Asha phone in the process
Well, AAPL shareholders don't seem to happy about it since AAPL sold off today. If AAPL want to increase market share at the expense of profits then shareholders are going to lose. I believe the selling in APPLE stock is precisely the concern about margin compression that this sort of product will create. Right now it looks like APPLE is looking more to the incremental improvements in their products rather than innovative premium products. People pay a premium for Apple products because they perceive them as technologically better products. If that changes and they go for run of the mill products then in my opinion then the brand will suffer and people will stop paying the premium.
Steve Jobs is dead, and Apple is just a regular company now, albeit with a lot of extra cash in the bank. You can already see their looking to compete on margin now, versus innovation. That's where you can really hurt Apple now, and Nokia has a few tricks in their bag still ;o)
That's the thing I have been watching and asking so much with Apple. Please bear in mind that I currently own a MacBook Pro, iPhone 4, and 3rd-generation iPad, so it is not like I am an Apple hater or anything like that.
But, I continue to ask myself the question: What has Apple released that is truly new or ground-breaking since Jobs died? All I have seen are incremental or related improvements to existing products. By 'related', I would mean something like the iPad Mini. Technically a new product but, at the end of the day, just a smaller version of an existing product.
I agree that the field is quite wide open at the moment.