It was not long ago that teens flocked to Apple (AAPL) products because they were ‘cool.’ iPods were first adopted by teens and then migrated to their parents.
Of late, Apple is losing its ‘cool factor.’ As innocuous as it may seem, the perception of the loss of ‘cool’ has increased the long-term risk in Apple stock. Recently Forbes quoted Buzz Marketing Group in stating that young are turning away from Apple as they do not perceive it as cool. According to the group, Apple is not connecting with Millennial Kids.
Wal-Mart is offering an unlimited plan requiring no contract for Apple iPhone 5 for $45 per month. There is not much doubt that in the short-term Wal-Mart’s move will increase proliferation of iPhone 5. It may be good for Apple’s financial numbers for a quarter or two. Does it have negative long-term impact on Apple? Does it result in Apple further losing its ‘cool factor’? These are important open questions. Since Wal-Mart claims to be a value oriented chain, it is interesting that Wal-Mart is not offering a similar plan for Nokia high-end phones.
If the 97 comments and over 100 emails relating to my column Wal-Mart Sends iPhone 5 Downmarket With $45 Plan are any indication, the opinion leans toward Wal-Mart’s $45 plan posing new risks for Apple.
None of this is negative for Wal-Mart. As a matter of fact, Wal-Mart will see increased traffic and benefit from it. From an investment perspective, I have stayed bullish on Wal-Mart ever since recommending it as a buy at $58.88…Read more at Forbes
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