It was the announcement that many consumers and investors had been waiting months for, namely Apple's (AAPL) new iPhone and operating system. But investors weren't impressed. Apple shares fell 2.3% by Tuesday’s close and were trading about 5% lower Wednesday morning.

Credit Suisse, Bank of America and UBS all downgraded Apple’s rating to neutral but some firms like Canaccord Genuity and Nomura actually raised their price targets slightly.

Analysts liked the look and feel of the lower cost 5C model but many were disappointed that this so-called “cheap” iPhone costs over $500 for a 16-gigabyte model and over $600 for a 32-gigabyte one (without a phone carrier subsidy). Even with the subsidy, the phone still costs U.S. consumers $99, or just $100 less than the more expensive iPhone model.

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The new 5S iPhone, which is the expensive model, was more impressive. It has a faster processor, longer battery life, better camera and fingerprint scanner to unlock the screen and buy apps. Its 64-bit version is like “putting an Xbox in your hand,” says Howard Lindzon, CEO of StockTwits.

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But what about Apple stock?

"This is a crowded trade," says Lindzon. "I try to avoid stocks with real hard-earned money that have these battlefields. Time will tell."

So can the cheaper iPhone make inroads in China?

“Apple is thinking about how they sell Apple products, not how they sell stuff in China,” Lindzon says. “The market may not like it but Apple doesn’t seem to care about what the market thinks.”

But Apple does care about making money, argues The Daily Ticker's Henry Blodget.

It’s “obsessed with profit,” he says. “Apple is short-term greedy…[and] doesn’t want to reduce prices" which would be "an opportunity to destroy the competition."

Related: Apple's Cheaper iPhone is Key to Elusive Chinese Market: Piecyk

Apple could grow another way, notes Lindzon. He suggests that Apple “go after a Twitter or really lock down the screen…infiltrate the apps that sit on Google just like Google infiltrated the apps on the iPhone. It’s not just about hardware.”

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