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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: pyslent who wrote (171927)	7/21/2014 2:27:09 PM
From: Ryan Bartholomew	Read Replies (1) \| Respond to of 213182

Ryan, What do you take away from the observation that the 5C undersells the 5S by such a huge margin yet is good enough by most standards? I take it a prima facie evidence that the bulk of the iPhkne's market is not price sensitive. It could be that the 5S is perceived as the better value vs the 5C. Given the difference in quality, features, and price, that the premium is worth it. iPhone users are more often than not considering only iPhones, so they limit their value judgments to the various iPhone models. For those considering any type of phone, the value judgement could be quite different.For the price of a 5C, the quality of phone they can get has increased markedly over the past year or two. But Apple is in a great spot where I think that their user base is still largely unwilling to even try another brand. This phenomenon is not exclusive to iPhone either-- among Android buyers, the top selling phones are also the most expensive. True, and I'm expecting the same shift to happen with non-iPhones. Why would an Android fan buy a $650 S5 if they perceive they can spend half of that and get a phone nearly or even just as good? There are obviously smartphone consumers that are price sensitive, but Apple has little penetration there, with good reason. Their cheapest phone costs $400. Subsidized vs non-subsidized matters a lot here. The difference between $400 and $500 is a 25% cost hike. The difference between $100 and $200 is a 100% cost hike. Absolute price difference the same, but many consumers don't digest it that way and they see it as "the other phone costs twice as much". Move that to $50 versus $300 and the sensitivity is immensely more pronounced.