Apple Inc. (AAPL)’s Margins Are Its Undoing

Clearly, there’s a reason why Apple Inc. (NASDAQ:AAPL) shares began to slide during the final two hours of the trading day yesterday, just as Apple was failing to live up to the hype.

The 5s didn’t raise the bar high enough. It didn’t come in the larger form factor — or at least the option for the larger form factor — that has drawn the masses to larger Android devices.

However, the real reason why Apple is clearly out of touch is that the 5c is not the entry-level device that we thought it would be. It’s not cheap enough. Apple went ahead and put a plastic shell around last year’s iPhone 5, and it decided to settle for turning a fat profit on a small number of sales instead of shocking the world in a good way.

“Your margin is my opportunity,” is one of my favorite quotes from Amazon.com‘s Jeff Bezos.

Amazon’s ability to sell things at ridiculous price points — settling for market share instead of near-term profitability — has helped make it a force, with the Kindle line of products, in categories where larger tech names have faltered.

Well, here we are again. Apple is choosing to maintain its margins at a time when Google’s open-source platform, and Amazon, are willing to do whatever it takes to get bigger in mobile computing.

Apple’s margins are it’s undoing. The media invites promised that Tuesday’s even would brighten the day of the attendees. That may have been a hint on the colorful array of devices that we’re getting, but it turns out that Apple wasn’t very bright at all.

The article When Did Apple Lose Its Magic Touch? originally appeared on Fool.com is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, and Google.

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