Will Apple's iPhone 5C Cannibalize Profits?

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Sept. 10 (Bloomberg) -- Emily Chang reports on the pricing for Apple's new iPhones. She speaks on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

It starts at $99 with a two-year contract.

That is for the 16 gigabyte phone.

The 32 gigabyte phone, 100 $99 with a you two-year contract.

-- $199 with a two-year contract.

That is in line with what people are expecting.

The question is what will be the unsubsidized price.

Is it going to come in under $300? that is the hurdle people have been looking at.

It sounds like it will be close.

This is really important because it suggests what is offered in the u.s.. when they introduce a lower-cost iphone, if the price is really close to their high-end phone there is a question of cannibalization.

What is the price point, that may be more interesting.

This suggests a full-fledged top-of-the-line iphone may have a better chip and better camera.

They see the camera is going to be eight megapixels, equal to the iphone 5 and one of the best features of the iphone 5. rehear the iphone 5 -- we hear that the iphone 5s may have a faster processor.

And the timing to come out so early in the press conference, we will see what that means for the press conference.

They usually save the best for last.

And the john -- and the lead designer, jonathan ives, joining the event talking about the iphone, calling it a distillation of what the people loved about the iphone 5 and the experience.

We take the new phone and go down -- they tear apart the phone and look at the componentry.

It is really hard for them to get lower in price and offer the same features.

Think about the difficulty of all these devices.

Their software requires a lot of specialized hardware.

It is difficult to lower the price and go to a classics green -- classic screen.

Every single penny counts in the making of these phones.

I want to get back to cupertino headquarters.

What do you make of this new family of iphones?

What does it mean for countries like china and emerging-market seattle -- emerging markets?

The next likely part of the story is does apple have a deal ready to go with china's largest carrier, which has 740 million subscribers?

Bloomberg news has reported on that.

The math would suggest that if they want to sell a lot of phones through china mobile, that can happen very quickly.

To cory's point about what exactly goes into this lower- priced phone, there has been speculation about how the component costs essentially can come down to make it just as profitable, if not more profitable for the company.

Some analysts suggest that maybe they can bring down the component costs by about 65%, which seems like a massive number.

Going back to the immediate market, assuming there is a deal with china mobile coming, close to 150 million of those 740 million subscribers who are using three g devices and high- end smart phones, that is the math on this story.

You are going to see the analysts pull out their pens and start to crunch the numbers on wall street on what kind of iphone numbers we could see heading into the holiday.

This is a product that represent at least 50% of apple revenue right now.

This is a very stock market focused story.

Can i make a point?

Just interesting on the chip question.

This is going to get really the key -- really geeky -- go deep into the weeds.

The earlier discussion was the processor going from the five to the 5s, we will be interesting -- it will be interesting to see if it is corroborated.

People won't see the kind of performance improvement in their everyday use of the phone.

That is noteworthy because you cannot offer it as a big performance improvement.

It is a less performance improvement from before to the -- going from the 4 to the 4s. are they holding back a faster product -- a faster version for the iphone 6?

This text has been automatically generated. It may not be 100% accurate.


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