Apple Inc. (NASDAQ:AAPL) released two new iPhone models yesterday, the Phone 5c and the iPhone 5s. Shares in the Cupertino company dropped by more than 2% on yesterday’s market after the release, and the company’s shares fell by more than 4% in pre-market trading this morning. Analysts were not happy with the release and it showed in the notes they published on the event.

Apple iPhone 5C

Price targets and ratings dropped on the Cupertino company this morning, and with good reason. Apple Inc. (NASDAQ:AAPL) shares rose more than 17% through Monday because everybody was expecting the company to claw back its competitiveness in China. Apple did nothing of the sort at yesterday’s event.

Apple price target

A report from Citigroup Inc. (NYSE:C) released yesterday afternoon put a price target of $520 on Apple Inc. (NASDAQ:AAPL) shares and left its rating of the firm’s shares at Neutral. Glen Yeung, the analyst who authored the report, was disappointed by the lack of a mention of China Mobile at the event. Apple Inc. (NASDAQ:AAPL) didn’t mention a deal with the carrier at this morning’s Beijing event either.

China Mobile has 700 million subscribers and none of them can get their hands on an iPhone. The iPhone 5c probably supports the LTE standard that China Mobile is using, so Yeung thinks that a China Mobile deal is coming, but Apple Inc. (NASDAQ:AAPL) hasn’t put together all of the details yet.

UBS, Credit Suisse and Bank of America Corp (NYSE:BAC) all cut their price targets on Apple Inc. (NASDAQ:AAPL) in reports released this morning. The theme of the reports was the same. The iPhone 5c is not a cheap iPhone, and it will do little to ingratiate itself in the Chinese market. This morning Apple Inc. (NASDAQ:AAPL) announced the phone would cost the equivalent of more than $700.

Apple kills the cheap iPhone

If Apple Inc. (NASDAQ:AAPL) didn’t release a cheaper iPhone this time around, there seems little chance of them doing it any time soon. Apple is likely to continue the iPhone 5c policy of upping margins and reinvigorating the old premium iPhone. The price will be the same, and there has been no move on China.

Analysts and investors were looking for something new and exciting from Apple Inc. (NASDAQ:AAPL) at yesterday’s event, and they didn’t get it. Investors were expecting Apple to break into China this time around. That didn’t happen, and the gains the firm made in recent weeks are being erased.