Apple's decision to launch a budget version of the iPhone was yesterday greeted with dismay by investors, who sent its shares sliding towards their biggest one day fall in eight months. More than
Investors had believed Apple was poised for a land grab on
Apple's shares fell 6% the day after it unveiled two new models, the colourful 5C, and the high end 5S, which contains a fingerprint scanner to unlock the phone and make payments. At least four banks downgraded their recommendations on the stock, marking Apple to neutral.
Analysts dismissed the new phones as a "disappointment". With a difference of just pounds 80 between the two handsets - the 5C costs from pounds 469 out of contract, while the 5S starts at pounds 549 - the pricing strategy was described as a "head scratcher".
The lack of a distribution deal with
"Overall, we are disappointed with Apple's announcement," said
Those looking to buy a cheap iPhone will have to make do with the 4S, which will be free with a contract. Last year's iPhone 5 has been discontinued. The 4S handset was released two years ago and its camera and processing power are inferior to those of cheaper models currently made by other brands including Samsung.
"By ignoring the mid-tier smartphone segment, Apple will continue to lose users to the Android ecosystem," warned Credit Suisse analyst
A survey by ChinaDaily.com indicated only 2.6% of Chinese shoppers would consider purchasing the 5C at the price set by Apple. The device, described by Apple's chief designer Sir
UBS reduced estimates for iPhone sales, saying the company would ship 158m units, compared to a previous estimate of 175m units. Not all commentators were downbeat. Four banks raised their price targets on Apple's shares, including Nomura, which revised its bet on the share price from
The launch of the colourful new Apple iPhone 5C handsets in
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