Does Apple Need to Stop Pretending?

Shoppers just don't buy Apple (NASDAQ: AAPL  ) as a budget brand, Fool contributor Tim Beyers says in the following video.

Look at the iPhone 5c. Not only has the 5c suffered price cuts at major retailers, but a recent report in The Wall Street Journal stated that Apple plans to cut orders from suppliers of its budget phone this quarter, presumably due to weaker than expected sales.

If there's a clear message here, Tim says, it's that the market doesn't want to see Apple selling cut-rate gear. Shoppers expect a higher quality product and a better experience -- a premium feel consistent with the brand that the late Steve Jobs spent decades building.

Do you agree? Do you believe Apple's budget iPhone delivers on its brand promise? Please watch the video to get Tim's full take and then leave a comment to let us know where you stand.

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  • Report this Comment On October 21, 2013, at 8:35 PM, Gr0w wrote:

    As for the speculation about supposed cuts in production ... Tim Cook, at the Jan. 23, 2013 conference call said:

    "I would suggest it's good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what's going on."

    Apple never said that the "c" in "iPhone 5c" stood for "cheap". The 5c was not a change to a downmarket market-share maximising strategy. It was idiot-analysts who jumped to that conclusion and then when their guess was proved wrong declared it a failure on Apple's part rather than a failure of their own guess work. It has business-as-usual on Apple's usual policy of selling last year's as the second stringer after a new release. This time rather than simply move the old ''5" downmarket they have first designed a version that costs them less to make. Your colleague understands this:

    http://www.fool.com/investing/general/2013/10/21/the-iphone-...

    Philip Elmer-Dewitt did a good job on these supposed supply chain rumours:

    http://tech.fortune.cnn.com/2013/10/20/apple-iphone-supply-c...

    This supposed "Failure" of a phone - the iPhone 5c is in the number 2 slot of best selling phones at AT&T and Sprint, while its sister the iPhone 5s is number 1seller at all four major U.S. carriers — AT&T, Sprint, Verizon, and T-mobile.

    http://appleinsider.com/articles/13/10/04/apples-iphone-5s-t...

    On Saturday Daniel Eran Dilger came back to this whole "failure" myth and comprehensively debunked it:

    http://appleinsider.com/articles/13/10/19/the-mysterious-fai...

  • Report this Comment On October 22, 2013, at 1:37 AM, SimchaStein wrote:

    Is this article a parody on how to write yet another facile Apple article on Motley?

    The "C" sales are phenomenal considering:

    1) The 5S is way better than the $100 premium.

    2) You can buy a 4S for $100 less; or a used 5 for about $200 less.

    Looking at unlocked price, Apple's used and new prices range from below $250 (4S used) to about $850 (fully loaded 5S).

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