Apple Inc. (NASDAQ:AAPL) is having an increasingly difficult time pleasing investors and analysts. They said the company needed to release a less expensive iPhone in order to compete with low-cost Android devices.
Now the LA Times reports that Wall Street is concerned about consumers choosing the iPhone 4 or 4S instead of the iPhone 5 because of cost. But what Apple Inc. (NASDAQ:AAPL) has done is offer up a less expensive iPhone without even having to put one into production. The iPhone 4 and 4S are both not only less expensive than the iPhone 5, but since they were already in production, the setup needed to produce them has already been in place.
Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
And then there’s the iPad Mini. It was launched to compete with smaller, less expensive tablets, but instead of being happy about that, investors began to worry about gross margins. And the gross margin concerns are only going to get worse, especially as low-cost iPhones become part of the Apple picture.
Forbes contributor Ewan Spence believes it’s more important for Apple Inc. (NASDAQ:AAPL) to focus on building up its ecosystem through users rather than gaining market share for its iPhone. Chances are, people who buy an iPhone may be more likely to buy an iPad or other Apple device because of the ecosystem. It’s easier to link them all together because they’re all Apple Inc. (NASDAQ:AAPL) products, so the cost of a single customer often goes beyond the purchase of a single iPhone. It’s about bringing that customer entirely into the Apple Inc. (NASDAQ:AAPL) fold.
Of course this means the company will need to come up with some other products to add into its ecosystem, which is why analysts have been speculating about an iWatch and an iTV. Unfortunately however, there is increasing concern that Apple Inc. (NASDAQ:AAPL)’s innovative touch disappeared along with Steve Jobs.
Investors have begun looking to Google Inc (NASDAQ:GOOG) instead of Apple Inc. (NASDAQ:AAPL) when it comes to innovation, but that may be because Google is so open about what it’s doing. The company flashes its fancy gadgets at every event it attends. Whenever Google employees show up sporting some kind of new gadget, everyone pays attention, and Apple’s secretive nature may be working against it.
Apple Inc. (NASDAQ:AAPL) said almost a year ago that it would increase its secretiveness. So there’s a chance that the company does have some exciting and innovative products in the pipeline. If that’s the case, you can bet the company’s stock will climb as quickly as it has fallen in the last six months, if not more quickly.