One advantage Apple has this holiday is that the new products are not terribly expensive. The least expensive iPhone 5S retails for $199. The least expensive iPhone 5C sells for as little as $99. The least expensive iPad Air retails for $499.
The reason for the lack of optimism about Apple’s holiday prospects fall into at least two categories. The first is that the iPhone 5S and iPad Air are not sufficiently different from their predecessors to get consumers to upgrade. Apple has a long history of substantially changing product features from one generation of product to the next. In the case of the new iPhone and iPad, this trend was lost.
The second concern is based on Apple facing competition it never had before. AT&T Inc. (NYSE: T) displays Samsung, Nokia and HTC smartphones nearly as prominently at its online store as the Apple products. And most of these are priced below the current generation of the iPhone. The Samsung Galaxy S4 is already considered a better smartphone than the iPhone 5S in some circles. The place the iPhone holds among carriers has been overwhelmed. The same problems hold true for the iPad. AT&T’s online site displays Nokia and Samsung products alongside it. The carrier no longer promotes the iPad as its premier product.
In addition, Apple may have made a terrible error this holiday that will make its sales situation worse. The delay from order to shipping for all three iPhone 5S models is three to five business days. For the iPad Air, the delay is five to seven business days. That is the shipping date, not the date on which the consumer actually receives the products. If Apple made a mistake in terms of the number of the new products it needs to have for sale over the holidays, it may cost the consumer electronics company sales it cannot offset once December is over.
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