My Trefis

Well first of all I would like to point out that the kind of response iPhone5 has received in the Pre-Orders is symbolic of the success of its predecessors more than the victory of the iPhone5 against its peers already floating in the market. A lot would actually depend upon how the consumers actually like the iPhone5 relative to its peers as far as the basis of any forecast of its future is concerned. While I would not usually doubt AAPL on satisfying its consumers, there are a couple of gambles from AAPL this time around which makes it a bit different than usual and I am referring to the bordered view for Apps due to the larger screen size and obviously the absence of Google Maps, these may turn out spoilers for the iPhone5. As far as the pricing is concerned, 460 Current USD in 2019 would mean effectively USD 387 considering 2.5% annual inflation, well that would mean we are looking at around 40% decrease in iPhone's effective price over the next 7 years. This looks completely possible if we were to believe Apple's critiques and go by the assumption that innovation in the smartphones industry has almost plateaued, in-fact I would further lower it to around 410 current USD, as all the premium AAPL has ever been able to charge its customers has been on the back of its unique ability to deliver innovation in creating something "Outstanding" that just deserves the premium and given the current state of the smartphone industry with such strong competition in the form of Samsung, Googorola and Finish Windows in the order of their likely effectiveness I would think that this is going to be the biggest challenge AAPL has ever faced. I think engineers at AAPL are already aware of this and are probably working on something seemingly groundbreaking already but given the uncertainties linked to that scenario I would assume that iPhone prices would not be able to defy gravity unless theres another 2007 moment in iPhone's lifetime. [ less... ]