"At some point in this game, Apple has to make a strategic decision," said Max Wolff, chief economist and strategist at ZT Wealth. "Eventually, they have to choose market share or margin. And $550 [for the iPhone 5C] is not how you maximize your market share."
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Of course, high prices are a big part of Apple's business model, and not for the sole reason that engenders large margins for the company. "To preserve their premium brand and premium image, they have to charge a premium," Wolff said. After all, when people buy an iPhone, part of what they're buying is "the lifestyle."
Still, with Apple ceding more and more market share to the Android operating system, "the missed opportunity might have been a more aggressively priced 5C," Wolff said.
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Credit Suisse analyst Kulbinder Garcha believes that Apple already has chosen a path—and chosen the wrong one. In a note entitled "So much for the low end …," Garcha downgraded Apple shares to "neutral" from "outperform" (he maintained his $525 price target).
"We remain disappointed with Apple's decision to remain a premium priced smartphone vendor, and this continued to competitively expose the company," Garcha wrote.