Ever since introducing the iPhone 5c last month, Apple (AAPL +2.66%) has taken a lot of investor criticism over its pricing strategy. However, this skepticism could potentially be misplaced, as Wells Fargo analyst Maynard Um makes the bullish case for the plastic device. Um notes that Apple faced a tough decision. The company could have either priced lower in pursuit of unit growth while risking margins, or gone the safe route by sticking with its existing pricing strategy and margin profile while not focusing on unit growth. Obviously, Apple is sticking with the latter.
That could be good news if investors consider recent history. Last year, iPhone 4s demand didn't ramp up until the holiday season, and Um predicts the same thing will happen this year with the iPhone 5c. If that proves true, then Apple's decision to stick with its existing pricing and margin structure would be a definite win.
In this segment of Tech Teardown, Erin Kennedy discusses the iPhone 5c with Jamal Carnette and Evan Niu, CFA.
