The trouble with being a mega-company like Apple is that the bar is eventually too high. It certainly seemed that way when Apple unveiled the iPhone 5, a modest upgrade to the iPhone 4S, though at least it introduced a much needed bump in screen size. Yesterday, however, rumors of an even larger size iPhone were debunked when Apple trotted out a pair of new iPhone models still featuring a 4-inch display. A day later, the company's stock is taking a beating.
In case you missed it, Apple on Tuesday introduced the iPhone 5S and 5C. The 5S model is an upgraded device with a 64-bit A7 processor (the first smartphone ever to have a 64-bit CPU), better optics, a fingerprint reader embedded into the Home button, and some new color options like gold.
The iPhone 5C takes the place of the iPhone 5 with a starting price of $99, but it's made of colorful polycarbonate plastic with a steel reinforced frame that doubles as an antenna. It's available in a variety of colors like the iPod touch.
Apple may have made two mistakes here, one for each device. First, it seems the public wants a bigger display, and if Apple needs proof of that, it need only look at Samsung and how well it's Galaxy line sells. The 5S didn't deliver, and while the 64-bit CPU is cool, only tech savvy users are likely to be geeked about that.
Secondly, the iPhone 5C is priced too high. Apple is choosing to make money straight away from iPhone 5C sales rather than aggressively go after market share that it lost to Android. Imagine if Apple priced the iPhone 5C at $50 or even free on a two-year contract. That probably would have swayed potential Android buyers into jumping ship, the hardcore anti-iOS crowd notwithstanding.
As a result of those mistakes, or perhaps because the expectation is so high these days, Apple's share price is down around $28 today, or about 6 percent. The company is still worth hundreds of billions of dollars, but if you're an investor, this is not wanted you wanted to wake up to in the morning.
What do you think about Apple's new iPhone models? Do you agree that they're overall underwhelming, or are the expectations too high?