Seeking Alpha

Cook defends 5C's pricing, analysts set weekend iPhone targets

  • "We never had an objective to sell a low-cost phone," says Tim Cook (AAPL +1.8%) in a BloombergBusinessweek cover story, defending the iPhone 5C's pricing amid criticism it's too expensive to challenge cheaper Android phones that have helped give Google's OS a 79% smartphone share (per IDC).
  • Adds Cook: "There’s always a large junk part of the market ... We’re not in the junk business." Some might disagree all of the latest mid-range Android phones fit that description. Meanwhile, Jony Ive takes a not-so-subtle jab at Samsung's product strategy. "We didn’t start opportunistically with 10 bits of technology that we could try to find a use for to add to our features list."
  • Gene Munster forecasts 5M-6M iPhones will be sold this weekend, after the 5S/5C go on sale on Friday. That's only a little above last year's 5M first-weekend iPhone 5 sales, something Munster attributes to supply constraints. BTIG is more optimistic, predicting at least 6M weekend sales.
  • iOS 7 was installed on 29% of all iOS devices within 16 hours of yesterday's release. The download activity was strong enough to make total Internet traffic spike in parts of the U.S. and Europe; that's an incremental positive for Apple CDN partner Akamai (AKAM +0.4%).
  • The Verge's David Pierce has given iOS 7 a score of 8/10. He's a fan of the OS' Control Center and improved notifications, but calls its design "disjointed and confusing in places," and its icons "horrible." "iOS 7 is full of big, sweeping changes ...  but in the end the new visuals don’t offer much change under the surface. Not yet, anyway."
Comments (51)
  • Generally disagree with Pierce's comments; the icons are different, but not horrible. Some people simply hate change. iOS7 is certainly faster on the iPad (more useful desktop apps) but is a bit quirky. Not surprising, I've had at least three or four dozen app updates from software makers in the last 12 hours to make their apps more compatible with the new platform. 8/10 is probably a good unbiased score, but for someone who hasn't upgraded their smartphone in a long time, it's likely 9-10/10. Great value for the user.
    19 Sep 2013, 10:49 AM Reply Like
  • I just downloaded the new iOS7. It is SOOO fast and it took me 15 minutes to discover at least 7 things I like better. This is going to be huge. You owe it to yourself to download it NOW!
    19 Sep 2013, 03:13 PM Reply Like
  • What does a "horrible" icon look like? If the analyst can't figure out the new icons, I wouldn't trust his opinion on anything. IOS 7 does consume more space on my 5. Yet, it seems faster. The pull down notification changes save me several strokes and the pull up control panel is a winner.


    iRadio is not the actual radio stations like on Tunein and Apple TV as I had expected. I'll have to play with it more. At first pass it seemed confusing.
    19 Sep 2013, 04:34 PM Reply Like
  • People do not like change, including myself. It is different and will take some time to get used to. However, there are many benefits to his new OS and they will become even more evident as time goes along. It eliminated your iphone from being robbed by someone with this new system. They also made this huge changes elsewhere for a reason. Time will tell what those other reasons are.
    19 Sep 2013, 10:55 AM Reply Like
  • I trust Ive to give me what i didn't know that i wanted.
    19 Sep 2013, 10:57 AM Reply Like
  • When you are down to simply talking smack, kind of shows where Apple's leadership is(RIP Steve Jobs). What about the margins, Mr. Cook?
    19 Sep 2013, 10:59 AM Reply Like
  • Are you saying that Jobs never "talked smack" and was open to providing detailed insight into the companies product strategy?


    I don't think you remember Steve Jobs.
    19 Sep 2013, 11:08 AM Reply Like
  • Also, the 5C is all about preserving margins... and he basically implied that in the article. Try reading it?
    19 Sep 2013, 11:15 AM Reply Like
  • An article is just words. Look at the facts of the margin erosion across all of Apple's products. Will it be stopped, or will it continue? The numbers will speak for themselves, I see the trend continuing.


    I remember Steve Jobs quite well. I don't hold punches when I say that Steve Cook can't handle the job title he currently holds and he doesn't hold a candle to Jobs. Margins are falling, and so far, Cook has no answer. I hope he proves folks like me wrong.
    19 Sep 2013, 11:21 AM Reply Like
  • Sounds like you hold Steve Jobs in quite high regard. But yet you think he made such a huge mistake appointing Cook the CEO.


    Arguably the biggest decision to cement his legacy, yet he chose such an unfit successor. Quite the contradiction.


    Since it was Jobs decision, apparently Jobs is the one that will be proving you wrong, not Cook.
    19 Sep 2013, 11:32 AM Reply Like
  • Energysystems: how exactly is Tim Cook or Apple "down to simply talking smack" in your mind? Did you not comprehend the Anandtech article on the 5s? I know it's technical, but do try to follow along.
    19 Sep 2013, 12:09 PM Reply Like
  • I bet you would talk smack to people who steal from you.
    19 Sep 2013, 12:59 PM Reply Like
  • APPL is making more profit, selling more products, and the stock price is higher than under Steve Jobs.


    Sentimental much?
    19 Sep 2013, 01:01 PM Reply Like
  • Personal opinion: just downloaded iOS7 yesterday and love it.


    And I definitely agree that every time I read about a new Samsung phone, it just seems like they added a bunch of features just to say that they did. I like how the iPhone works, the Galaxy phones just seem like a bunch of unrelated features. None of them have made me think about changing phones yet.
    19 Sep 2013, 11:11 AM Reply Like
  • iOS 7 already around 37% download in 21 hours.
    19 Sep 2013, 11:45 AM Reply Like
  • Try using one before you come to such conclusions.
    19 Sep 2013, 01:41 PM Reply Like
  • I have been using ios 7 beta since July, it was good except occasional crush. just upgraded to GM yesterday, It's super smooth and brazing fast, and much stable than beta. Not getting crush once.
    19 Sep 2013, 02:17 PM Reply Like
  • I love Cook's attitude. Go Cook, go Apple!
    If you think iPhone is too expensive, don't buy one.
    I have lots of shares of Apple but I was cheap so I bought an android which works fine. (LG from Virginmobile usa)
    Personally I believe Android is better for tablets than iOS but what I think doesn't matter to the crowds in an Apple store.
    19 Sep 2013, 11:14 AM Reply Like
  • "Personally I believe Android is better for tablets than iOS but what I think doesn't matter to the crowds in an Apple store."


    If anything, it's probably the other way around. Not as many tablet-specific apps for android, and the android phones are just so much more feature-rich and come in better screen sizes than the IPhone.
    19 Sep 2013, 11:58 AM Reply Like
  • Android is in no way better for tablets. It's an embarrassment on tablets.
    19 Sep 2013, 12:10 PM Reply Like
  • "Android is in no way better for tablets. It's an embarrassment on tablets."


    Ever used a Galaxy Note or a Nexus tablet? I am going to guess no ;)
    19 Sep 2013, 12:42 PM Reply Like
  • I've used a number of Android tablets extensively. I write software.
    19 Sep 2013, 12:58 PM Reply Like
  • "I've used a number of Android tablets extensively. I write software."


    So have you used a nexus or a galaxy note? Android comes in all flavors, from the cheap no-name sub-$100 disposable tablets to premium offerings to everything in between


    That's the great thing about android.... if all you can afford is a $150 tablet, there are some very good 7-8" models out there you can sink your teeth into. If you are willing to pay more, the nexus 10 or the Note 8/Note 10 will keep up with an iPad.
    19 Sep 2013, 02:25 PM Reply Like
  • I have the Nexus 7 and it isn't as good as the first generation iPad.


    Nexus 7: Youtube videos are locked portrait mode? I've googled fixing that but it's shocking that it is released that way...


    Then there is the keyboard issue where android keyboard locks up and you can't type anything. SUPER ANNOYING. Just makes me want to return it but instead I let me 2 year old son play with it but he too prefers a gen 1 iPad.


    Oh and while i'm thinking about it, the cable connector on the Nexus (and all android devices) is so frustrating that most of the time when you go to plug it in, it is so tight and tricky to get in that I flip it over thinking it must be upside down when in fact it wasn't. Trying to plug it in while in low lighting is almost impossible. Inferior components absolutely tell the story on the Nexus IMO.


    Not exactly "junk" but nothing great about cutting all the corners you can to make a cheap product.
    20 Sep 2013, 12:44 AM Reply Like
  • What a jerk
    19 Sep 2013, 11:15 AM Reply Like
  • I see you have reached the anger stage of grief.
    19 Sep 2013, 12:10 PM Reply Like
  • "just horrible" would be a matter of aesthetic opinion. Pierce is obviously no fan of minimalist art.
    19 Sep 2013, 11:59 AM Reply Like
  • I agree with me cook. what's the purpose of making inexpensive phones if it doesn't create a profit ? while market share is down the fact is that apple Y/y phones sales are up. fcf is robust and growing. the never ending nay Sayers would have undoubtedly criticized mr cook had a cheap phone been introduced and margins /profits were lower than the premium phone. mr cook, ignore the naysayers.
    19 Sep 2013, 11:59 AM Reply Like
  • IOS 7 and iTunes Radio are both excellent. The mix on the radio based on your selected artist is nothing short of the best out there, IMO.
    19 Sep 2013, 12:29 PM Reply Like
  • Did Tim Cook just said that the Android phones are junk ?
    19 Sep 2013, 12:44 PM Reply Like
  • The problem is the new iPhones don't offer anything materially better than the 4s. We all have iOS 7 now. I know people will talk about the A7 chip. How much faster can a phone get? I can't see my 4s getting noticeably faster. The fingerprint scanner is worthless to me at this point. Maybe bigger and better is coming in the future with respect to the fingerprint sensor, but it's just a way to unlock your phone right now. I see no reason to upgrade my phone to a 5c or 5s unless it fails or breaks. I'm content with my 4s.
    19 Sep 2013, 12:50 PM Reply Like
  • The 4s is a great phone. One of the iOS ecosystem strengths is that you do get significant system software updates for longer than competing platforms at the moment. If you are fine with your 4s, then absolutely, enjoy most of the benefits of iOS 7 on one of the best smartphones ever made.


    However, that does not mean that the new phones don't offer anything materially better than a 4s. Almost every aspect of the phone is materially better. Just because you personally don't see any reason to upgrade from your 4s, doesn't mean that other people have no reason to buy a 5c or 5s. Get over yourself.
    19 Sep 2013, 01:09 PM Reply Like
  • 2much.... If you live in an area that has LTE support I found that was reason enough to upgrade as Internet queries/downloads are as fast as my wifi in my house. LTE support was provided in the 5.
    19 Sep 2013, 01:13 PM Reply Like
  • Good point bgold. That's a nice improvement with the 5, 5c or 5s.


    tech: I am fully aware that other people have reason to buy the 5c, 5s and/or 5. I am providing my opinion, for whatever it is worth (clearly nothing to you). I am not the only person who feels this way. There are very minimal internal upgrades that actually provide immediate benefit to the user in the 5s and none in the 5c when compared to the 5. A little more so when compared to the 4s, but not a lot. That's my point.
    19 Sep 2013, 02:55 PM Reply Like
  • Don't quite get how you can say minimal internal upgrades on the 5s. I agree on the 5c - 5c is basically Apple saying we messed up having the 4S as our basic phone because even though we lowered price people want something new - so they provided the same phone but with colors. All strategy, very little new for the consumer. 5S on the other hand - you're just not paying attention. Finger print scanner, twice as fast processor (you might not care until you use it then don't want to go back), and way better camera. Don't see how those aren't significant.
    19 Sep 2013, 04:25 PM Reply Like
  • @ Goldtean: Who cares about the finger print scanner right now? Why is this important for the 5s? It just unlocks your phone. Again, maybe it's important for the future, but how is it significant for the 5s right now? I haven't heard any good reason for an upgrade due to the finger print scanner. Way better camera? 8MP - remains the same as 5 and 4s. Okay, it has a slightly larger aperture, dual flash and a slightly larger pixel size, but nothing groundbreaking. This is a move in the right direction, but not a significant camera upgrade. I saw a side by side with the pictures of the 5 and 5s and I don't see a significant difference. Lighting can be adjusted to a certain degree through filters and 3rd party apps anyways. I'm all about a faster processor, but I don't think there will be a noticeable difference in speed, except for gaming. A significant portion of the power of the A7 chip won't even be accessible due to insufficient RAM. When was the last time you heard an iPhone owner (4s and up) complain that their phone was too slow?
    19 Sep 2013, 04:47 PM Reply Like
  • My wife has a 4S and my 5 is much much faster.
    20 Sep 2013, 05:20 AM Reply Like
  • I've upgraded my iPad (retina display). Amazing! Everything working perfectly. You know, it's funny. Whenever there's a new "revolutionary" android phone, you never see the waterfall (tsunami?) of highly charged discussions about Apple vs. Android. But when Apple does something like iOS 7 or 5c/s, people go nuts. Why? Because Apple started this whole thing and along the way, Google came in and is doing what it does. Great! We win! We just keep getting more and more great choices and products. So here's to Apple raising the bar again. Apple lovers rejoice and Android fans should be thanking Apple too. Go Tim Cook!
    19 Sep 2013, 01:19 PM Reply Like
  • "So here's to Apple raising the bar again. Apple lovers rejoice and Android fans should be thanking Apple too"


    Maybe AAPL lovers can thank GOOG for giving iOS all of the features it ripped off of Android :)



    19 Sep 2013, 01:24 PM Reply Like
  • chopchop, are you still here? I guess the Korean high schools let out early today.
    19 Sep 2013, 03:15 PM Reply Like
  • "I guess the Korean high schools let out early today."


    Rocback, do you troll every thread on AAPL? It's amazing they still pay you at the genius bar. Maybe this your official job?
    19 Sep 2013, 03:45 PM Reply Like
  • Google ripped off more features from iOS than iOS did from android. Same with windows vs. Mac OS. The difference is that Apple features are so subtle and easy to use that people think "of course this is how a phone should work" when in reality it is a masterpiece of design.
    19 Sep 2013, 04:29 PM Reply Like
  • "Google ripped off more features from iOS than iOS did from android."


    That's very subjective. If that the were the case, AAPL would have sued GOOG instead of Samsung over android because it would have been a slam dunk case.
    20 Sep 2013, 10:42 AM Reply Like
  • car i chin buy large amount AAPL again and will speak with cook shortly.
    19 Sep 2013, 03:17 PM Reply Like
  • Just read the piece from Bloomberg quoting Cook etc. Personally I think Cook et al need to get out into the world to see see how blinkered they are!!
    I don't see the market for cheaper phones as a junk market. It's a market just like any other market and Apple should be looking at how to make money in the so called "junk" market like any other market. Bit of arrogance there I believe.


    With regard to new products. Why no Phablet? Why does apple not have one? Apple has me as a customer for now. But I remember when I was in Asia looking over enviously at all the phablets people were using. I want one and will be buying one at some stage in the near future. Hopefully an Apple product as I do not wish to spend the time figuring out how to use Android. But If due to apples lack of innovation I am forced to switch to get one of these devices I will switch. And I can assure you I have plenty of disposable income to spend when I have one of those so called junk devices.
    Which brings me to the idea that once you lose a person to a particular operating system you may have lost them for ever. A lot of young people who do not have a lot of disposable income now will have that income in the future. Apple is being rather presumptuous in thinking these people will switch to Apple if they don't win their minds now!


    Now why am I holding their stock again?
    19 Sep 2013, 03:17 PM Reply Like
  • right... according to you Cook should water down his #1 global brand just so he could create demand among price sensitive consumers who aren't looking for quality, but are more interested in saving $. in other words, you want cook to take his premium product and turn it into JC Penney of the smartphone market. that just sounds so ridiculous, no offense.
    19 Sep 2013, 04:19 PM Reply Like
  • No offense taken! There was no suggestion on my part on Apple dumbing down their current phones. But I do believe they should be producing multiple products, including a phone that caters to the masses, that are not as affluent as their current users. It certainly never hurt Henry Ford.


    There seems to be a little bit of snobbery going around with regard to the Apple users and Android users. I for one do not understand this
    20 Sep 2013, 01:36 AM Reply Like
  • Why doesn't Mercedes or BMW sell cheap cars? Question answered implicitly.
    20 Sep 2013, 01:40 AM Reply Like
  • And that is why BMW and Mercedes trail Toyota by a wide margin in market cap. Can't have it both ways - luxury brand and largest company at the same time.


    Apple will have to choose. Shareholders should be asking these very tough questions. Marriott, to give an example, does an excellent job at brand portfolio management and is able to serve all segments while maintaining premium pricing for their truly premium offerings


    JW Marriott (high end)
    Marriott (premium)
    Courtyard (business mainstream)
    Fairfield by Marriott (value)


    Apple is foolish.
    20 Sep 2013, 12:06 PM Reply Like
  • Another person that needs to get out in the wider world. Go to Germany. Mercedes BMW are as common as your average Ford. BMW especially.


    Apples profits are down 20%. Managements job is to increase share holder value! There not doing that at this moment in time.
    20 Sep 2013, 10:24 AM Reply Like
  • They just released all new equipment and you're talking about the profits before we see the numbers for these releases. I would expect profits to be the least right before a new release, as they have captured most of the value of the previous releases.


    Perhaps BMW and Mercedes are not the best examples. But I never said Apple's products would suffer if they became "common." I merely suggested that a high price fits a high quality product.
    20 Sep 2013, 09:53 PM Reply Like
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