GO
Loading...

New iPhone: ‘Beautiful, but wrong price’

Tuesday, 10 Sep 2013 | 6:35 PM ET
New iPhone: 'Beautiful, but the wrong price'
Tuesday, 10 Sep 2013 | 5:18 PM ET
Pricing for new, low-cost iPhone won't help lift Apple stock, Peter Misek of Jefferies says.

Apple stock won't see much of a lift from its new low-cost iPhone 5c, Jeffries Senior Technology Analyst Peter Misek said Tuesday.

"See, even if it's subsidized, it's pricing itself out of the market, and the reason is that the subsidy amount will be added to your monthly bill, and the average Chinese person, Indian person can't afford it," he said. "It's just too expensive. Every analyst expected – including ourselves – the phone to be priced $300 to $400. This is a lot higher."

Apple announced two new iPhone models, the 5c, which starts at $99 with a subsidy, and the 5s, which starts at $199.

Misek has a $450 price target and a "hold" rating on Apple stock.

(Read more: Apple goes plastic and colorful with new iPhone line)

On CNBC's "Fast Money," Misek explained why Apple missed the boat with China Mobile users.

"That low end of the market is where the growth is. The high end is saturated," he said. "We think this is not a good thing. We were very, very disappointed."

JPMorgan's China and emerging market outlook
Should investors buy into the China hype? Chinese stocks have surged nearly 14 percent in the past 2 months. Adrian Mowat, JPMorgan shares his strategies.

Misek said China Mobile users are charged much higher fees for subsidized phones.

"You just pay a lot," he said. "If you think your AT&T or Verizon phone bill is, you should see what theirs is. It's tough."

(Read more: 'I sold all my equity exposure today': Brian Kelly)

While Apple could provide its own subsidy, Misek said it still isn't an attractive price point for most users in China when compared to Google Android phones.

"Not when you get a $200 phone that's great, that's made by a Chinese manufacturer, runs the latest version of Android and has a much bigger content library than iTunes in China," he said. "This is a wrong price. Beautiful phone, by the way, but the wrong price."

Apple stock, he added, would see lackluster performance as a result.

"If you look at consensus numbers for next year, they're expecting significant iPhone growth and significant EPS growth," he said. "I think this pulls both those things off the table. I think the Street has to come down to our numbers."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

  Price   Change %Change
GOOGL
---
AAPL
---
941
---
T
---
VZ
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report