iPhone 5c Pricing an Issue From Day One: Blair

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Oct. 16 (Bloomberg) -- Wedge Partners Brian Blair discusses Apple's plans to cut iPhone 5c production. He speaks on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Be reduced by less than 25%. it went on sale in the u.s. last month with a suggested price of $99 with a service contract.

A principal partner and senior analyst from white partners is with us.

We have been talking about the 5s selling so much better than the 5c. now, cutting orders.

What do you know as far as what is happening?

We wrote about this to our customers last week.

We believe apple has been cutting their production estimates for the year.

Whether by 30% or 40% is not clear.

What we're confident saying is they have cut production meaningfully for the fivec, but we also believe they have raise production for the 5s, which you cannot find in stores, the hottest product out there.

Investors have been concerned about sellthrough on the 5c since pricing was announced.

It has been widely available, has not seen the sellouts as the 5s. if the 5c is being cut and more 5s'are being produced, what does this mean for apple?

Overall, a production cut.

Units will come in lower than expected.

I initially thought it could be in the 58 million range.

Now it is likely to be in the 53, 50 4 million range.

So there is a cut.

In terms of the stock, investors express this concern.

Once people realized it was going to be $550, a lot of investors, apple sold off at that moment.

People realized that this would not successfully attack the lower end of the smartphone market.

Investors priced this in a while ago.

Not a huge impact on the stock, in my view.

Do you think apple flubbed this 5c launch?

Should they have stuck with their original strategy just to make the older model d cheaper model -- the cheaper model?

I think it was important to have all of these colors.

The pricing was the problem.

They should not have been $550. it should have been a lot more palatable.

Even if you walk into at&t or verizon, you can get it for free on contract.

The perception is, this is a much lower quality device.

In china, i have heard the joke, c stands for cheap.

If you are going to make it cheaper, it should be more affordable to consumers.

Do you think they could cut the price?

I think they absolutely will.

We may not see a price cut until september of 2014 when they will introduce the iphone 6, and then we could see it come down in price and sharply.

October 22 is coming up, apple having a big event.

We expect a new ipad2 be unveiled.

To you know what we are likely to see?

I think we will see the ipad mini introduced with a retina screen.

That was one of the things it was lacking when it was introduced.

On the larger ipad, we will see a much smaller bezel.

The area around the screen itself will be considerably smaller, making the device more portable.

We will see a faster processor and the fingerprint sensor will be in there as well.

Apple says that we still have a lot to cover.

Could there be something else, not an ipad or mac, something more?

If it is not a mac, perhaps we get new commentary around the apple tv software.

I do not think we will see a large formfactor television yet.

I think that will be a 2014 event.

It is likely they could potentially introduce an app store.

We will be watching, brian.

Thank you for joining us this morning.

Time for on the markets.

Alix steel is in new york.

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


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