Apple Inc. (AAPL): What Verizon Communications Inc. (VZ)’s Numbers Actually Say

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The company has been facing heavy criticism regarding products like the iPhone 5 or the new iPad models since they are incrementally better than previous versions, but they don’t include any breakthrough or revolutionary innovations. According to some Apple bears, the company lost its ability to innovate and disrupt when it lost Steve Jobs.


Realistic expectations

Let´s face it, the iPhone 5 is better than previous models, but there is nothing revolutionary in it. When it comes to Apple fans, those who absolutely must have the latest product, those people don´t usually buy their smartphones from Verizon, they are more likely to make a line in front of an Apple store to get their hands on the product as soon as possible.

Other consumers just make a price and quality comparison, and many of them have rationally found that older models are a better deal for them. What´s wrong with that?

The iPod, the iPhone and the iPad were revolutionary products when they were first launched, after that, it was all about marginal improvements and incremental innovation with the new versions. The iPhone 5 is not different to other Apple products in that sense.

If you are expecting a revolutionary product from the company, look for a new iTV, a smart watch or some other new launch. New versions of existing products have never been revolutionary when it comes to Apple.

The iPhone has moved way beyond the early adopter phase, it`s not only for Apple fans now, it’s a product for the masses, and many consumers are choosing the cheaper version of the product.

Considering all the talk and rumors about the need for a cheaper iPhone, we should keep in mind that the iPhone 4 and 4S are in fact cheaper iPhones, and they are selling quite well. According to Tim Cook there was not enough supply of iPhone 4 to meet demand in the last quarter of 2012.


Bottom line

The numbers from Verizon show that the iPhone is doing better than fine in the U.S. Yes, older versions are gaining participation versus the iPhone 5, but that´s no reason for panic and no reasonable explanation for the sell off either.

There is just too much negativity surrounding Apple these days, and investors seem to find reasons to sell with every piece of news. This formerly high-flying stock has become a contrarian opportunity.

The article What Verizon’s Numbers Really Say About Apple originally appeared on Fool.com and is written by Andrés Cardenal .

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