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  • ABCs For Apple: C Is Not For Cheap 0 comments
    Sep 12, 2013 2:03 PM | about stocks: AAPL

    Wall St had their minds set on some ABCs:
    A is for Apple
    B is for Business
    C is for Cheap

    And they got really disappointed Wednesday when C turned out to be for Color instead of Cheap. (Do they know C is also for Cookie?)

    For years now, Wall St has demanded Apple specially design and sell a cheaper phone. Wall St is stupid. Apple is not in the Business of making Cheap products. (Can you imagine Wall St asking Nordstrom to sell Walmart branded products? Of course not!)

    It costs a lot of money to design and manufacture a new phone. Even a new cheap phone costs money to design, test and manufacture. In the past, Apple saved themselves a lot of money by not designing new a low cost iPhone and instead simply sold the old iPhone model as the "Cheap" phone. (Apple already had the manufacturing and supply chain set up which already allowed better margins and no cost. Apple also had no shortage of customers buying their older generation products. Sounds to me like a win-win for Apple.)

    But this year, Apple did something different. Apple is repackaging the guts of the iPhone 5 into a new case and selling that as the "Cheaper" and more Colorful iPhone 5C.

    Apple is still selling their older iPhone 5 model as the Cheaper phone, but it's now got a shiny new Colorful package! The new Colors will now tell all your friends whether you paid the big bucks for the premium iPhone 5S or opted for the repackaged iPhone 5C. Genius marketing move Apple. Well Played.

    I propose a new set of ABCs:
    A is for Apple
    B is for Banking
    C is for Cash

    The Count is at $145 Billion and counting.

    Disclosure: I am long AAPL.

    Themes: iPhone Stocks: AAPL
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