New iPhone: ‘Beautiful, but wrong price’
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.
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"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."
Misek said China Mobile users are charged much higher fees for subsidized phones.
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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."