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| iOS7 and iPhone 5C |
Apple's shares were down about 5.6 percent at $467.24 in early trading on Wednesday, a day after it unveiled the 5S, a high-end iPhone with a fingerprint scanner as well as a cheaper 5C model targeted at emerging markets.
"...We worry that Apple's inability/unwillingness to come out with a low-priced offering for emerging markets nearly ensures that the company will continue to be an overall share loser in the smartphone market until it choses to address the low end," Sanford C. Bernstein analysts said in a note.
Still, Bernstein maintained its "outperform" rating on Apple's stock, saying it expected the new iPhones to have little impact on gross margins.
Nomura Equity Research analyst Stuart Jeffrey, who raised his price target for Apple shares to $480 from $420, said Apple may have ensured stable margins for the next couple of quarters by pricing the 5C at $99 with a contract and $549 without.
This was not enough for BofA Merrill Lynch, Credit Suisse or UBS, all of which downgraded Apple's stock to "neutral".
"Rather than offer attractive pricing for consumers, and move the iPhone 5c into a new and growing price segment, Apple retained a premium pricing strategy in targeting the $400-800 smartphone segment," Credit Suisse analyst Kulbinder Garcha said in a note.
"This segment is not forecast to see meaningful growth long term. This decision, at the margin, is good for profitability but not growth."
Garcha said that Apple's share of the smartphone market, where it faces intense competition from Samsung Electronics Co Ltd, would likely fall to 15.5 percent this year and 13.1 next year from 18.1 percent last year.
