After yesterday’s iPhone event, major financial firms downgraded AAPL which has resulted in a ~6% drop for AAPL this morning. As reported by ValueWalk, JPMorgan Chase & Co, Credit Suisse Group AG, Bank of America, and UBS AG downgraded the tech company yesterday.

For Credit Suisse, AAPL is now considered “neutral”, down from “outperform.” Many of the analysts and financial firms were expecting the iPhone 5c to be an inexpensive model for China and other markets where phones go unsubsidized by carriers. However, the iPhone 5c was announced to be only $100 less than the flagship iPhone 5s.

Two days ago, we posted Fortune’s stock price chart that showed AAPL investors, by “conventional wisdom … buy the rumor and sell the news, but the series of stock charts … suggest the opposite.” However, yesterday’s downgrades and the resulting drop in AAPL stock price seem to abide by the conventional wisdom, as Apple never publicly announced that the iPhone 5c was going to be a low-cost or rather inexpensive model for the emerging markets, yet investors are disappointed by the company’s inability to match the rumor mill.

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37 Responses to “AAPL down nearly 6%: downgraded by big financial companies after yesterday’s event”

  1. For me, Apple not entering the low-end market was the best news to come out of yesterday’s event!

    • I could understand why BUT why not price the 5C at $499 or even $550.. It seems to be more of them trying to get money out of us then anything.

      Have you also noticed that no carrier & Apple is NOT letting pre orders or reservations for the 5S? It seems to me they think everyone will go for the 5C instead of the 5S. Why not make the 5C the high end with the fingerprint scanner & make the 5S the low end one then…

      My think is that Apple screwed up here.

    • Chad Elliott says:

      I feel the exact same way, but at the same time, they used cheaper parts to make ‘essentially’ the same phone (the 5). I’m assuming they’re expecting profit margins to suddenly jump with everyone buying them [the 5c]. Which could also be why they’re only pushing preorders for the 5c and not the 5S.

    • ifunography says:

      My take on it is that by using plastic enclosure for the 5c, it reduces BOM and increases margins on the older product. Over the past year, when the lineup was (4, 4S, 5) remember how they mentioned there was still significant uptake of older models. This move allows Apple to reap more profit from older hardware while advertising it as a “new” phone.

      By not making the 5s available for pre-order, that means anyone who wants to be among the first to get their hands on a 5s, has to head out and line up at an Apple Store which is good for marketing and PR. Remember the Samsung ads mocking iPhone buyers for lining up? Huge lines will say “People don’t care what you say, they’re lining up for our products anyway!”

    • standardpull says:

      Ooops! Wall Street totally missed the fact that the 4S is now a $1 phone. Those silly guys seemed to miss the fact that the 4S easily exceeds all the $1 phones out there, and competes well with many $200 devices.

  2. PMZanetti says:

    The lack of an 8 GB iPhone 5C at $0/$450 is disappointing. Who the hell wants a 4S (besides Ben Lovejoy)?

  3. Finally stock holders are realizing that Apple is nothing but just making the same phone over & over & pricing the low end model $100 less then the flagship. If Apple was smart, they would have priced it $499 & the iPhone 5S $650 & NOT $715 that is it. No matter what technology the iPhone has, its not worth to spend $1,000 for a 64GB model iPhone 5S with taxes & 1 case lets say.

    Maybe now if the stock holder keep going low, Apple will realize the mistakes they are doing.

  4. Caanan Kent says:

    Why would you link (and lend credibility) to traffic bait websites like Value Walk?

  5. Jim Phong says:

    It’s time to fire Tim Cook and his gang of lazy employees !
    Bring back the team that Steve Jobs assembled. And put an engineer, programmer employee with a vision as CEO of Apple. Someone that understands what customers want and can use the huge amount of money Apple got to deliver new outstanding products quicker to market and better than anyone else.
    Tim Cook has to go. He is killing Apple.

    • mockery17 says:

      So who gets to be the CEO then? You? Good luck with that…

      • I’ll take Tim and his crew over anyone on this message board. Some of you are so shortsighted that you can’t see what SAMSUNG is now trying reproduce based on the features and the technology built into the 5S. The M7 chip alone just blew up the SAMSUNG watch in a 2 minutes presentation on the chip set.

    • Chad Elliott says:

      Killing? I have to disagree. Running it a way Steve Jobs never would have, yes. Tim is making the company more “friendly” I guess you could call it. He’s done a bunch more publicity stunts than Steve has.

  6. I’m not surprised. Apple really disappointed me yesterday with the iPhone 5c pricing. They seem so hell-bent on their profit margins I’m not sure they understand the concept of competitive pricing. The 5S is a phone i’d rather pass on in favor of the 6 and I was hoping the 5c would be the LTE-capable iPhone I need to tide me over under then at a competitive price. But that price is not competitive.

  7. kpom1 says:

    I think the reason there are no pre-sales of the 5S is that supplies are relatively tight. The rumor mill also had it that there were yield and production issues with the fingerprint sensor. I’m not terribly surprised at the 5C pricing, but did think that maybe they’d drop the 4S and release an 8GB iPhone 5C that could be sold for “free” with contract ($450 non-contract).

  8. Luckily I was able to sell my AAPL stock before it plunged.

  9. Many of us felt the same when the iPad mini came in at $329 instead of $299. I love Apple, but it’s just the cash grab.

    We all have seen where Apple drops the price of last year’s iPhone model by $100 and sells the new iPhone model at the $199+ mark, so anyone who doesn’t see that the 5S is a minor revision to the 5 as the 4S was to the 4, and 5C is just the 5 rebranded in colored plastic (which is probably even cheaper to produce now than the 5), is plain blind. It IS the same old story again. But they’ll likely profit as always, though I suspect the response might be more tepid, since people are catching on. This is the first year in all of iPhone’s history that I’ll purposely sit out of an early upgrade.

    I’m wondering if this will be the moment that Apple’s bubble bursts. I would never wish it, but I wouldn’t be surprised either.

  10. mockery17 says:

    I gotta love the interwebs.

    “Apple making a low-cost iPhone”: Why would Apple enter the low cost market and degrade themselves? Tim Cook is killing the company! Fire him!
    “iPhone 5c not as inexpensive as expected”: I’m so disappointed! From the beginning I was told that it is going to be cheap by everyone except Apple! Tim Cook is killing the company! Fire him!

  11. Yup. Easily understood. Keep pushing out those goofy plastic Chinese colors and watch it go down even more.

  12. Analysts are the dumbest people on earth. Always making unrealistic predictions and senseless assumptions. Knowing Apple, even a small kid would know that Apple doesn’t make cheap! Yet these fellows create artificial boosts and downgrades, simply making money somewhere I guess!

  13. ashtraywasp says:

    “..investors are disappointed by the company’s inability to match the rumor mill.”

    Although there is some truth to that, I think Apple’s falling stock price is for the first time, very very well deserved. They may have never said that a plastic iPhone would be cheap, but that is the very natural assumption that most would arrive at.

    The tiny incremental difference in price between the 5s and the 5c is a monumental failing. Putting the specs of last year’s iPhone in a plastic case, however well thought out and gorgeous the case may be, would make perfect perfect sense for the vast mid-market. Priced at a 1:2, or even 3:5 ratio with the 5s BOTH would have sold like absolute hot cakes. People all around the world adore the iPhone, it is the flagship of all smartphones, and I don’t think the lower cost version would have changed that. Tiny bit of cannibalisation? Perhaps. But doing so would have made the iPhone available to a whole new vast world of people, in the West and the East.

    I think the pricing of the 5c, and the pricing alone, is Apple’s first major failing in years. They’ve missed the boat. And the iPhone that could have been for everyone, now targets no one.

  14. I don’t think the last sentence is quite right. Investors are disappointed that their expectations were wrong. The view has been that a low-cost model for emerging markets would make good business sense. They were pricing the stock with a view on the probability that Apple would announce such a product and the impact that would have on profits. The change in price reflects revised expectations of profitability based on this new information.

    Probably best to leave the financial analysis to qualified writers. Lots of people could disagree with my view but a little understanding about how markets function is pre-requisite.

    • Scott Buscemi says:

      Thanks for the comment. I’m uncertain as to how you have come to the conclusion that I am not a qualified writer. In addition, much of the investor expectations came from the rumor mill, which is exactly what the last sentence states.

  15. good lord when the 5S and 5C YET AGAIN break sales records, these guys are going to look like the buffoons they are.

  16. I don’t know guys — but I’ll definetly go for the 5S … stop being cheap bastards, get a work and buy your own stuff, if you can’t afford it then buy other thing.. it’s that’s simple.

    • Chad Elliott says:

      lol. Agreed. While the iPhone is pretty expensive, you can still get away with owning it for 3+ years. Android counterpart, I’d have to say that sure they’re cheaper than the iPhone, but you’d have to upgrade to keep up with the CONSTANT stream of new phones on the market.

  17. It´s amazing that nobody gets Apple or Tim Cook. The 5C *IS* a low-cost phone. It is in fact ridiculously low-cost. Plastic and 1year+ old hardware inside. But it is *branded* as a brand new top of the line phone, with IOS 7, iTunes Radio,iLife and iWork for free. It´s a whole new experience for 95% of all customers buyign it.

    Apple doesn´t care about tech geeks like us, they care about being profitable, as well they should.

    You ever stop wondering why http://www.apple.com is showcasing 5C and not 5S first? Why only 5C is pre-order from 13th while the 5S can only be bought in store on 20th? They stand to sell a *ton* of these to young kids, and new buyers. Their profit margin on this device is through the roof high. It´s the *new* and cheaper way to get into IOS for new comers. It will make them a killing.

    Wake up people, let apple do its thing – and ignore “the market” they´re almost never right anyway when it comes to tech. They´ll realize it when Apple release their next quarter numbers, and it´s revealed that they are increasing their margin again while increasing revenue as well.

  18. Jim Phong says:

    @Kurt Pimentel: either you work for Tim Cook or you are the one that doesn’t have a clue. Tim Cook is killing Apple. He gave precious Apple money to investors.. Steve Jobs refused doing that to avoid exposing Apple to Wall Street sharks. He released the iPad4 shortly after the iPad3 that got obsolete and at the same time he didn’t do anything to sell the iPad4 because he wanted to release the iPad Mini.. and the result? iPad sales lowered overall. Apple sold less iPad than ever before.
    Then what about the MacPro turned into a childish trash-can with external expansions? And that thing by Jony Ive on crack should be for professional use ?
    And again iOS 7 graphics are a childish mess like the atrocious Microsoft Metro. The engineers and coders did a top-notch job with APIs and at the low-level with the new 64bit mode taken directly from OSX (after all iOS it’s a crippled OSX..now less crippled) BUT the UI looks bad, a very lazy work like on Android UIs and Microsoft Metro. Steve Jobs wouldn’t have allowed anything like this to happen, ever.
    And now the iPhone 5C scam.
    It’s just too much.
    Tim Cook is a marketing guy, he doesn’t have a clue what he is doing. He is killing Apple just like previous managers did when in charge before Steve Jobs became the CEO again. Apple was going bankrupt if it wasn’t for the Steve Jobs return. Now Tim Cook is quite quickly causing Apple to go the same fate again.
    Either Tim Cook is an idiot OR he is being paid by competitors or group of investors that want to destroy Apple.
    There is no other explanation for such a mess.

  19. Mani Sohi says:

    The price of 5C had to be kept close to the 5s in order to boost the latter’s sales initially. I bet we will see a 50-100$ reduction in 3-4 months.

  20. I’ve been using apple products since i can remember and never even looked at alternative products! (Pretty much an apple fanboy as some might say) However its time for change apple haven’t given me anything that has been worth the money or exciting for the last few years!

    £549 for the 16gb 5s in the uk about £100 too expensive for what it is in my opinion!

    Sorry apple im going elsewhere :(

  21. Are you guys still alive?? I mean the so called analysts who downgraded the company.. where are you?? i cant hear you.. aah got you you saw the news already that 9M iphones sold??.. Gotcha