iPhone 5S a True Breakthrough for Apple: Blair

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Sept. 10 (Bloomberg) -- Wedge Partners' Brian Blair and BGC Partners' Colin Gillis discuss Apple's new iPhones with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Shareholders excited about apple stock?

We bring in our closer, colleen gillis, director of research.

Brian, you are right there on the ground.

Tell me your reaction to the two phones.

On the five s, i think it is incredibly impressive.

It really represents a breakthrough for apple.

It is the first smartphone ever based on 64-bit computing.

That means it is bringing the power and capability of the desktop computer into your phone.

You are getting incredible graphics now.

You mentioned the biometric fingerprint reader.

It is right right under the home button.

I just laid with that.

It works beautifully as a password replaced -- played with it.

It works beautifully as a password replacement.

So only you can actually get into your phone, correct?

That is exactly right.

Is this a precursor to the iphone wallet, do you think?

I think it is.

The fact that you can use your fingerprint to make a purchase is a precursor to e-commerce capability.

So much of your life is stored in your phone, photos, passwords, personal information.

To be able to verify that individual with a fingerprint is amazing.

I used it.

It worked seamlessly.

Let's talk about the five c. one of the markets that is critical that they have not been able to penetrate is emerging markets.

Is this going to make a difference for them?

That is the question.

The price point they are coming in is still going to be relatively expensive for emerging markets.

What is the competition doing?

$99 with a contract versus -- on the flipside, it might be 500 -- $500-five hundred $50. i understand that the apple has published a price point for the five c over $500. i think that is why you are seeing the stock him down.

Apple is clearly making a choice to preserve margins.

You can get a nokia alumina for $100. they are preserving markets.

That is great, but we need to see if they will get the volume people expect.

I can get a new offense -- new iphone for about $200. - what is the possibility that china would be willing to subsidize this?

That is the big question.

In many ways, the event today carries more -- the event tomorrow carries more weight than the event today.

There really were no surprises today.

Quakes do you think tim cook is setting a different tone?

I thing internet bloggers, people in the supply chain have become pretty adept at sharing little leaks, whether it is color, sensor, it is a big business finding out what apple is doing.

There have been a lot of people involved.

The volume of information leaking has certainly increased.

It is not a problem for apple, but it does take the surprise out.

A lot of people are watching this stock.

The five c has a high price point and may not help them in the emerging market environment.

The stock is off 1.6%. you have a $500 price target.

That is basically where it is now.

What are you thinking?

I think a lot of the news that came out today is already properly reflected in the stock.

We are going to have a ton of rollout in the september quarter.

That historically is not the case.

We usually have a december quarter rollout.

2 million sold in the pre-order, 5 million sold in the first weekend, another 2 million when it launched in china.

September quarter is looking pretty strong right now.

Last year apple made $44.50. this year, that drops to $39.09. when are we going to see earnings growth longer-term?

This is the whole point about apple and why i had the $500 price target.

We want to see new revenue streams.

You need to build in new things.

It is an exciting day out there, but colin raises a great point.

You have to have new products.

As you talk to people out there, what is the word about new products?

There is still an expectation out here that we are going to see a television from apple in 2014. tim cook talked about his grand vision for television.

I think that is likely to be one of the new revenue streams.

But this new iphone does represent new revenue streams.

The multiple colors and the fact that it has a lower price point will help it go into emerging markets, even if the initial volume is lower because of the high price point.

The addition of china mobile will add a lot of volume.

A new carrier will add a lot of volume.

We are going to see revenue streams in growth, but i think the new opportunities are in tv and maybe wearables after that.

Everybody knew we were going to see the phones we saw here today with some technologies like the fingerprint technology.

Do you believe apple has lost the ability to surprise the investment community?

They have not lost the ability, it is just getting a lot harder.

The supply chain is leaky, for lack of a better word.

You have millions of components being built and it is hard to hide every single one of those when somebody like a blogger from us really i can pay $200 and get the casings or -- from australia can pay $200 and get the casing for the new iphone.

The mac pro has not come out yet but we saw it in june.

I think there is a chance of them doing that with the television and the wearable because they are not interacting their own market yet.

We will be watching for it.

Thank you so much brian.

Coming up, apple is trying to prove it can grow, but we are going to show you some tech companies that are already growing.

Adam has today's insight in action.

We will see you back here into cu.


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