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Technology Stocks : Apple Inc.

AAPL 259.35

+0.1%

3:59 PM EST

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To: Moonray who wrote (169454)	5/14/2014 12:12:08 PM
From: pyslent	1 Recommendation Recommended By HerbVic Read Replies (1) of 213181

Needham & Co.’s Charlie Wolf reiterates a Buy rating, and a $590 price target,writing that “the surprising strength of iPhone 4S sales in the March quarter challenges the conventional wisdom that Apple has to build a low-end phone to retain share in the smartphone market.” The 4S added 10 million new owners to iPhone in the quarter, he points out, proving “the iPhone’s brand is so strong, a two-generation-old iPhone despite its premium price holds great appeal,” which “confirms Apple’s ongoing commitment to building the aspirational brand” even at the low end of the market.” Wolf isn't thinking big enough. The reason to sell a low cost iPhone is to sell 50 million a quarter. Even if the incremental profit per user is not what Apple is used to, it's better to get them into the ecosystem than concede them to the competition, all things being equal. Maybe it doesn't happen, but the 5C has given us a blueprint on how to NOT cannibalize high end sales. Throw on the Beats brand onto a 5C and it could probably sell for $300 without disrupting high end sales :).

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