Will iPhone 5C, 5S Open New Markets for Apple?

Your next video will start in

Recommended Videos

  • Info

  • Comments


Sept. 11 (Bloomberg) -- Bloomberg's Jon Erlichman and Michael Chasen, former CEO & co-founder at Blackboard, discuss Apple's new iPhones and whether the lower prices will successfully open markets overseas and in the United States the company couldn’t previously penetrate. They speak on Bloomberg Television's "In The Loop."

The ceo of social radar is here with me in new york, and senior west coast correspondent jon erlichman is with me from los angeles.

You have tried a new 5c. what do you think?

This is a device that i think will have a market for sure.

Some people think it has a plastic back -- what does that mean?

Will it break?

I don't think so at all.

The idea is that it will make a big splash in emerging markets . but people are complaining that ultimately the price point without the contract is still too hi.

Just to give people the back story, if you were -- generally speaking there is this view that if you are eyeing this phone in a market like china, you might be buying it without a carrier contract, meaning you will pay that ultimate price without subsidy.

Some people are talking about that being in the neighborhood of $400, and that did not turn out to be the case.

It turned out to cost well over $500. the feedback seems to be , if you are apple sitting around the board room table and you are trying to price this device for the market like china, do you really want to give up margin right off the bat if you think there is pretty good demand for that device?

Trish, we don't know how this device will sell until it is out there and people are buying it, but that may be part of the logic here.

To suggest that apple is not fixable on pricing ultimately is probably not necessarily the right thinking by the marketplace.

Apple has priced it where it will.

If it does not get the sales it wants, maybe there will be flexibility.

I want to ask you about the 5s and fingerprint technology.

Michael, the reality is everybody knew the news.

It is hard to be surprised by apple these days.

Certainly there was a number of announcements that apple made yesterday at their confidence -- at their conference.

The real way to look at this is the longer-term opportunity.

You talk about apple coming out with low-end models.

It is not just for the international markets but for the low-end market here at home.

Apple technology is available to a whole section of the market that otherwise was priced out of owning an apple smartphone and was typically leading android.

From this point forward, apple will be a lot more competitive, which will mean not only higher sales -- i am going to stop you there because without the contract you are still paying $500-plus for the 5c. there is a lot of other data out there.

While apple might be coming in slightly higher, they still have the opportunity to adjust it.

So why is it down 4.6% as we speak?

I think one of the concerns that analysts have is over margin depression.

If they come out with this lower-and iphone, maybe those who might be looking at the higher end might look at the lower end.

I also think the market hopes that apple will have another trick up its sleeve, and a lot of the information that came out yesterday is what was expected, and there were no big surprises.

That being said, the long-term opportunity with the new technologies apple announced yesterday is looking very bright for the company.

Let's talk about some of those longer-term technologies.

Jon erlichman, what did you hear that sounded promising?

They did not share any detail on what could be coming.

They made this very much an iphone event.

They are trying to push this idea that this figure print censor that you highlighted, and you pick up the device and you can press the home screen button, it recognizes who you are and you don't have to worry about a password -- that might be a gateway to a large commerce opportunity.

Although they did not shed a lot of light on that.

But the whole idea to smart ball it, that is a big opportunity for apple?


I will add that maybe there are some people talking about margin compression this morning.

The idea of them not coming out of the price point of whatever it is -- $400 off contracts -- actually means they are likely protecting a little bit of margin.

They might not sell as many units.

If the market is reacting negatively, maybe if they will sell fewer of those iphone 5c 's, as well as the profit margin being a bit squeezed.

Thanks for joining us.


You can catch jon erlichman with all the latest tech in media every day at 1:00 and 6:00 p.m. eastern time on "bloomberg west." adam johnson, will he be joining us question mark know, olivia is here for adam today.

Triple play, starting with

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


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change