Tomahawk, WI 9/18/2013 (BasicsMedia) – Apple Inc. (NASDAQ:AAPL) recently announced that it was launching a new iPhone in the market. While this is good news, what was not so good about this announcement is the fact that the company opted to charge high rates for the device. The decision to price the new Smartphone at an amount which most low-end users are comfortable with is one which has the potential to come back and haunt Apple Inc in the future. The company has to deal with the Asian Smartphone makers which are likely to charge lower rates with the intention of outperforming it.

AAPL’s Products Always Enjoy Very Good reception

Apple Inc already enjoys a hallowed place among lovers of Smartphone gadgets with its numerous products which have always been well thought out and properly priced. However, things are about to possibly change based on the company’s decision to overprice its latest iPhone. This move is likely to put unnecessary pressure on AAPL’s revenue growth as well as its margins. There are certain analysts who believe that AAPL probably took this path because they trust their ability to continue making profits, like they have always done in the past.

It is crucial to state that AAPL has not always placed a lot of emphasis on the sub $500 Smartphone market. This market remains the hottest among all the segments within this industry currently. However, the market has mostly had its needs met by Asian Smartphone manufacturers which AAPL will have to contend with if its price for the latest Smartphone is left to stand as it is. If AAPL is to continue on its path of growth, then it has to find a way of tackling the saturation concerns within the over $300 Smartphone market. This has to be its priority.

AAPL Has To Do A Lot of Work To Convince Smartphone Users

Recently, a survey was conducted among 35,000 iPhone 5S users by ChinaDaily.com. They were asked how much they are willing to pay for the new device from AAPL. Strangely enough, only 2.9% said they would be willing to pay $549 to buy this Smartphone from Apple Inc. If there ever was a clear indication as to what customers prefer, this has to be it. What this means is that AAPL faces a very uncertain future since their customers are not prepared to obtain this new Smartphone, which has amazing features and capabilities, at the price set by the company.

AAPL Struggling With iPhone 5S Supplies

Recent reports appear to indicate that AAPL already faces problems with the supply of this new Smartphone. Moreover, AAPL appears to have gone back on what it has always practiced whenever it launches a new product in the market. It has not given its customers the opportunity to make iPhone 5C preorders, much like they were able to do with the previously released iPhones. The decision to get rid of preorders for this iPhone could be due to AAPL’s uncertainty of its ability to supply enough pieces of this phone, and customers’ response to the high price.

When reports started circulating the airwaves that this iPhone 5S had several component problems, it became obvious that there would be a few hitches with the phone when it was eventually released. The high price meant that people would be unwilling to invest in this product before they were certain that the issues with components had been adequately addressed. It’s my belief that the decision to charge higher prices for this latest technological wonder from AAPL isn’t a smart move.

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