Apple

[Grieve]

Like I said, China does not do contracts. You have to buy the phone. Paying $700 up front is entirely different than over the span of 2 years. How many Americans would plunk down $700 up front? I mean, I guess they could take out a separate loan for it.

They do do contracts, but they don't subsidize the phone like we do in the US. However, in India Apple has started to basically do payments plans themselves - put down $100, and then pay $30 a month or whatever, with Apple acting as the "bank". I can see them doing the same in China.

The problem is that the media assumed that the C in 5C stood for cheap, when obviously Apple never intended to release a cheap phone - in fact they've said before they would never release a cheap phone. Which I think is smart - why dilute your brand? If Tiffany started a "Tiffany lite" brand with the jewelry a quarter of the price in their main line, I suspect it would kill their high end image.

I chatted to my team of developers in China last night, and they said it's not so much the price that is the problem, it's the perception that there isn't something new and exciting. I can see that - Apple tends to find a great design and then tweak and perfect it, not completely redesign each year. That's a problem in China, where they like people to see that they have the latest thing.

Selloff is painful. I still think it will be reversed when:

1) China mobile deal announced
2) New iPads announced
3) Blockbuster sales on first weekend.