Apple showed off its newest iPhones yesterday and the market did not like what it saw. Analysts at UBS, JP Morgan, Credit Suisse, and Bank of America all downgraded their ratings on Apple's stock, which is down more than 5 percent this morning.

The big concern on Wall Street was the iPhone 5c — investors were hoping Apple would unveil a low-end model that could compete on price with cheaper Android phones, which have been making big gains in developing markets like China. But despite its cheaper plastic shell, the iPhone 5c will retail for north of $700 in China, meaning it will be too expensive for most consumers there.

"The lower-priced iPhone 5c may not be priced low enough, in our view, which could limit incremental penetration of the midrange smartphone segment," writes Mark Moskowitz, an analyst at JP Morgan.

Apple also failed to announce a deal with China Mobile, the nation's largest carrier, which had been rumored for some time. It seems likely that Apple will get this partnership done, but it remains unclear when it will officially begin.

It's not unusual for Apple's stock to dip after an event, and the share price remains well above its recent low of $390. Investors are eager for a new narrative around Apple that could turn the stock's momentum around. A recent tweet from Carl Icahn's saying the company was undervalued boosted the stock by $17.1 billion dollars in 24 hours.

There were some bright spots in yesterday's event for Apple's business. The iPhone 5c, which will retail in the U.S. for $99 on contract, is cheaper to make than the iPhone 5. If it sells just as well, this could help boost Apple's margins. But overall, the market doesn't see gold at the end of this rainbow for Apple until it can find a way to significantly expand its reach to consumers of mid-priced smartphones.