Although Apple just released two new iPhone models, the company’s shares plummeted over 5% on Wednesday, and 2% on Tuesday. This type of decline is rare for Apple and has cut $35 billion from its market. Carl Icahn, an investor in Apple, believes the company should use the $147 billion it has in cash to buy back shares.
The two new products released by Apple, were the iPhone 5S and iPhone 5C, a cheaper model. The 5S costs $649 without a contract and the 5C costs $549, also without a contract. Many feel that the price difference isn’t that great and won’t be enough to boosts the company’s sales. Analysts at Bank of America, UBA and Credit Suisse mentioned Apple’s lack of innovation and new pricing as reasons why they downgraded stock to “neutral.”
Kulbinder Garcha of Credit Suisse said the new phones, “are not game changers and are more evolutionary rather than revolutionary. The slower rate of innovation comes at a time when high-end smartphone competition will remain intense from Samsung and others.” Garcha also added that he thinks Apple will lose market share to Android.
