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Apple Inc.'s New iPhones Have Arrived, Now What? 4 Investing Experts Respond

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After months of speculation, the smoke has cleared and we are left with the colorful iPhone 5C and the high-end, fingerprint-scanning 5S.

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Yesterday, several months of frenzied speculation and Internet rumors came to an end. Apple (NASDAQ:AAPL) introduced its newest two iPhones, the plastic iPhone 5C, which will replace the iPhone 5, and the higher-end iPhone 5S.

Many bloggers and analysts had predicted that a budget iPhone simply wouldn't happen, or else argued against the logic of Cupertino taking that route. But the iPhone 5C is better described as a cheaper -- rather than budget -- iPhone; the device, which comes in yellow, blue, white, and red, will be available with a two-year contract for $99 (16GB) or $199 (32GB), or unlocked for $550 (16GB) or $650 (32GB). On the Apple Store's Chinese website, the 5C is listed at RMB 4488, which equals $733 USD. That's certainly not a budget iPhone targeted at emerging markets, as early rumors had been suggesting.

The 5S, which Apple is calling its "most forward-thinking phone yet," will feature a fingerprint scanner in the home button for added security and convenience. Moreover, it will boast an 8-megapixel camera and brand new A7 chip, which makes the phone the first ever to have a 64-bit desktop-class chip architecture. That means the phone is going to be very, very fast. Available in the much-rumored gold finish, as well as silver and "space gray," the 5S will be sold with a two-year contract for $199 (16GB), $299 (32GB), and $399 (64GB). Unlocked, the device will be sold for $649, $749, and $849, respectively.

Following up on our story yesterday that previewed the event, four of Minyanville's finest tech-investing experts give their insights on what to make of the new iPhones and Apple stock.


Solid, but Missing the Sizzle Factor
By Michael Comeau

I am very excited about upgrading to the iPhone 5S, specifically for the enhanced camera. I was also impressed with the practicality of the new feature additions like the touch fingerprint ID scanner, and I like the look of iOS7 as a whole.

However, I'm not convinced it's going to excite the masses in any big way as there just wasn't the sizzle factor of something like Facetime. The 5S should sell well, but I just don't see it as a pure game-changer the way something like the iPhone 4 was.

Overall, I'd rate the event a B.

Michael Comeau edits Minyanville's Buzz & Banter and is also a regular columnist on Minyanville.com, focusing on technology and consumer stocks. Read more of his work for Minyanville, here.

Michael Comeau has a position in AAPL.

(See also: Apple's Most Boring iPhone Event Ever.)


Fingerprint Tech Is a New Killer App
By Sean Udall

To me, there was really only one surprise: the fact that the iPhone 5C is a global phone and effectively replaces the iPhone 5. I had thought this was going to be an emerging market phone only.

Oddly, the 5C phone isn't a much cheaper device, though I was never in the camp that believed Apple would be making phones in the $300 to $350 price range with no subsidy. But the phone is still about $100 more than I thought it was going to be. Everything else in the announcement was incredibly well-telegraphed from all the information we have received in recent weeks and from all the supply chain leaks.

In my mind, these are the key takeaways and lingering questions stemming from yesterday's event:
  1. Does the higher-than-expected price of the 5C imply that China subsidies will actually be more in line with those of the US and other developed markets? It seems that way, unless there is a wholly new "surprise" device that we haven't seen yet.
  2. iPhone 5C margins look to me to be higher than the current iPhone 5 margins, due to the cheaper materials used in construction.
  3. I think the fingerprint tech is a new killer app for Apple and a truly new innovation.
  4. I think this sets up a whole new and ripe monetization stream for Apple -- mobile payments.
  5. As I've said before, iOS7 will be very well received and is a huge improvement.
  6. And iRadio is likely going to be a monster product as well.
Sean Udall has a position in AAPL.

Sean Udall is an investment strategist, portfolio manager, and proprietary trader with extensive experience across a wide variety of asset classes, including equities, fixed income, currencies, and derivatives. He's a recognized trader, prolific writer, and the founder of the TechStrat Report, a technology-focused investment newsletter from Minyanville. Read more of Sean's commentary, here.
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