As one of the largest consumer technology companies on the planet, Apple (NASDAQ:AAPL) gets a lot of backseat drivers. Many analysts don’t evaluate the company and its stock as much as they attempt to develop a prescience about what Apple will or should do next. Sometimes these analyses are accurate and insightful; other times, they are speculative and vapid. Either way, they are a large part of the conversation: What can Apple do, what should Apple do, and what will Apple do?
Needham & Co. analyst Charlie Wolf took a stab at these questions in a Wednesday note seen by Apple Insider. In it, Wolf argued that it would be an “insane idea” for Apple to develop and produce an iPhone lower on the price spectrum than the 5C. Not impossible — Apple could clearly bring resources to take on such an initiative — but insane. That is, even though Apple could do it, it shouldn’t, and Wolf appears to be predicting that the company won’t.
Here’s why: Wolf argues that producing a truly low-end iPhone would both eat into the company’s fat margins, which help insulate the company from relatively low global market share, and do damage to the company’s brand (last valued by Interbrand at $98.3 billion).