The new Iphone for $127, consumer or company issue?

Over the last several years one of the most standout companies in the world has been Apple with the trendsetting Iphone.  Sales of the company’s core product have been the envy of almost any company. Quietly on Friday (12-14-12) night, Reuters released a story that  Wal-Mart was reducing the prices of the latest Iphone 5 product by a third and opening additional distribution at their stores.Iphone5

This announcement presents us with a tea leaf issue that we wanted to share with you.

  1. Are consumers pulling in their wings across the board? or
  2. Has Apple run into problems and not gathered the upgrades they had expected?

If option one is the answer, we may infer that consumers have finally succumbed to the fiscal cliff headlines and are getting worried. With one of the longest shopping seasons on record, measured in days, it would seem holiday sales should be robust compared to most recent years.

Option two being the answer, would clarify the question of why the most recent stock action for Apple has been very uncharacteristic, while most Wall Street gurus continue to pound the table on the stock.

Finally after a lengthy discussion this morning, Donald and I are not sure who is taking the margin hit on the product, Apple or Wal-Mart? Judging by the stocks of the respective companies this story did not have the teeth we thought it might, at least for now! We will continue to watch closely.

Have a Great Day!


8222 Douglas Ave # 590
Dallas, TX 75225

Comments are closed.