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Thursday, 20 March 2014 10:02

Apple’s move into cheaper gear confuses analysts

Written by Nick Farrell



What is the point?

The fruity cargo cult Apple appears to have missed the boat when it comes to its latest US releases. Jobs’ Mob hit thought that the reason people were no longer buying its gear was because it was too expensive and decided to drop the price. Well sort of. What it really did was release two new products with a spec which is lower than Barry White at a slightly lower price.

Apple released an 8GB iPhone 5c and reintroduced the iPad 4 which would be officially replacing the iPad 2 as the lower-cost iPad model. This is not surprising. At the iPad Air launch analysts scratched their heads and wondered who would be dumb enough to buy an iPad 2 for $399, as the iPad mini with Retina cost the same. Even Apple fanboys would not bother.

As for the iPad 4, its price of $399 puts it in competition with the Retina iPad mini which is priced the same as well. It is a much better deal than the iPad 2 it replaces, so it is possible that someone would pay less for a larger screen but for a heavier design. But then if they were going to sign up for Apple in the first place they are going to be the sort of people who want it all and do not care about price.

Analyst Gene Munster admitted the “new” products will have a slight positive benefit for Apple over the next two quarters and calls them “ultimately irrelevant” for the company's June quarter. Munster went on to say that Wall Street was dreaming if it thought Apple is expected to report a revenue of $38.7 billion which would be a 10 per cent growth. He said that there are no meaningful changes to the company's product line-up or identifiable seasonal trends heading into June, and there is nothing to suggest that Apple is going to see the acceleration Wall Street is expecting.

Nick Farrell

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