Apple just can't seem to keep Wall Street happy.
The tech giant's stock was down by about 5 percent on Wednesday afternoon after disappointing the street in two big ways this week. First, Apple didn't meet pricing expectations with its iPhone 5C and second, the company failed to announce a deal with China Mobile.
Investors and analysts anticipated the iPhone 5C would price in the midtier market at about $350 unsubsidized. However, the smartphone costs over $500 without a contract and about $100 with a two-year contract, a price that is still too high for Apple to sell the device in emerging markets, industry experts said. In China, for example, an unsubsidized iPhone 5C will cost 4,488 renminbi, the equivalent to $733.
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"Just how far behind is Apple trying to fall? I do not get Tuesday's release and product launches. Something is just wrong," Doug Kass of Seabreeze Partners Management said in a note Wednesday.
The developed world is saturated with smartphones at the high end, so any future growth will have to be geared toward emerging markets, Kass said. And customers in emerging markets are price-sensitive and want a lower-priced phone, but the iPhone 5C—or "iPhone dud," as Kass describes it—won't be cheap enough to drive market share gains that could lead to earnings growth.
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"The iPhone 5C, we are kind of concerned that it's being priced at $550 unsubsidized at the least in all markets of the world," said Kulbinder Garcha, managing director and analyst at Credit Suisse. "That's going to compete with the best and newest offerings from let's say a Samsung, who has bigger screens and better processors and cameras. What all this means is it really impacts the earnings growth."
Credit Suisse downgraded its rating for Apple on Wednesday from "outperform" to "neutral," but maintained its $525 price rating for the stock.
While many industry experts acknowledged on Tuesday that the high price wasn't ideal, they defended Apple's bet on the premium market because it meant the company didn't have to sacrifice margins.
(Read more: Apple's new iPhone 5C may be priced just right)