This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Can Apple's New iPhone Answer Margin Calls?

Stocks in this article: AAPL SSNLF GOOG CHL DCM

I won't deny that Apple's operating leverage has lacked flair in its first three reporting periods of the year. But I don't think the company demonstrated underlying struggles in operation -- at least not to the extent they were exaggerated by the Street.

Now with a cheaper iPhone, which is said to come in various colors, I believe Apple is saying "to hell with your margins." The company is now going after market share -- something that Apple has never before cared about.

But is it the right strategy? It's worked for Samsung. But absent strong profitability, I'm not convinced Samsung's investors have benefited, when compared to shareholders of Apple. The idea that Apple may join Samsung doesn't sit well with me.

Again, I'm not saying that Apple won't be profitable. I just don't have enough information to get excited about this launch -- at least not from an investor's point of view. As a consumer, I applaud the decision. But until details are shared about production cost of the 5C and at what price point the phone will be sold, we can only speculate the effects on Apple's margins.

And with details about plastic casings and downgraded features, logic suggests the price can't be too high. I don't know much more than that.

But what I do know is that the iPhone is still Apple's best-selling product. And if rumors are true that Apple will finally land the world's largest carrier in China Mobile (CHL) and NTT DoCoMo (DCM), it will be only a matter of time before Apple reemerge as a solid growth company, while shedding the hybrid/mature giant persona that it resembles today.

2 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs