In September, Apple launched a new line of cheaper-priced iphone product-the iphone 5C. The release was a success and Apple recently reported an increase of 4% in its quarterly revenue. However, the drop in price also led to a 8.5% drops in earning in the fourth quarter to 7.5B USD over 8.2B a year ago.

The demand for iphone 5C is elastic and a drop in price drove up sales and revenue. I think the drop in price can be perceived as a strategy Apple developed to combat its close competitors, such as Samsung. In the concept of creating shared value, Apple reconceived product and market by focusing this new line on the less wealthy customers. This way, Apple widened its customer segments by enabling a larger portion of the global population to use its product, which was not originally affordable by  many potential customers who were interested in it.

Apple expected revenue to reach between $55B to $58B in the first quarter of 2014. My opinion is that Apple should aim at ceasing its reduction in quarterly profit to maintain its stock price.

http://www.cbc.ca/news/business/apple-s-4th-quarter-profit-down-9-on-cheaper-iphone-models-1.2254969