“At a special event on Tuesday morning, Apple is expected to unveil two new iPhones — the first, a marquee device; the second a mid-tier one intended to be sold at a lower price that appeals to budget-conscious consumers and those in important emerging markets like China,” John Paczkowski writes for AllThingsD.
“So, what’s the price of that second, lower-priced iPhone going to be? We won’t know for sure until Tuesday, but it’s not likely to be cheap,” Paczkowski writes. “nalysts expect Apple to price the so-called iPhone 5C somewhere between $400 and $500, potentially establishing a new mainstream price band between the smartphone market’s high end and its low end. Their rationale? $400 to $500 appears to be a pricing sweet spot for smartphone buyers in China — a market of particular interest to Apple these days.”
Paczkowski writes, “If that’s the case, why not drop the iPhone 5C’s price lower still to drive further market share gains? Because doing so might sacrifice product quality and profit margins. And because, historically, Apple has done quite well for itself using mid-tier products with lots of aspirational appeal to draw budget-conscious consumers into a higher price range.”
Read more in the full article here.
MacDailyNews Take: As we wrote back in January: “You can bet that if Apple enters the pre-paid phone market in emerging markets, they most certainly will have margins and they will make a profit on each device sold.”
[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]
$350 off contract, $50 more than an iPod touch (5th gen.).
With the entry of iPhone 5c, there will be no need for the iPod Touch. It essentially is a iPad tiny.
The orders on iTouch screens were included for iPhone also… now that there is iPhone 5c — the orders are balance out and Apple can switch components to the needs at the last minute… no need for iTouch to engulf over flow or be used to bulk purchase gain.
Apple still needs a bigger phone not a inexpensive phone. Offering people iPad mini as a Phone is a better solution. Offering iPad 9.7 as a phone also is crazy big, yet with a bluetooth ear set you can keep the 9.7 inch screen in your carry bag and still place calls and make text messages via Siri. And for most part, now you can face your device still having the ear plug in and multitask your device. Enjoy, making calls and working on small projects at the same time. In fact no need for any iPods at all now.
Essentially the new iPhone 5c is an
iPod Touch with telephone capabilities.
True and fair, a 50 dollar increase, making it a 350.00 phone. Agreed, and Apple can stop producing the iPod touch and call it iPad tiny, iPad mini, iPad — three sizes. Then see how well the range in prices works with the range in screen sizes. The line up makes sense.
Essentially the iPod Touch is a iPhone without telephone capabilities. Or at least that’s what Steve Jobs said a few years ago.
“historically, Apple has done quite well for itself using mid-tier products with lots of aspirational appeal to draw budget-conscious consumers into a higher price range.”
— hence a 400 – 500 dollar iPhone 5c will not be much of a sweet spot leading people as would a hopefully 320.00 iPhone 5c… Apple wins then as many will feel need to opt-out for the ultimate 5s at 699 – 799.
LETS hope a 320 dollar iPhone 5c is the price.
5C = 350
iPhone 6 = 550
everything else – discontinued
iP5C, 16GB = 450, the same price as an unlocked 4
IP6, 16GB = Start at 650, the same price as previous new models.
Add 100 for 32GB and 200 for 64GB though not sure I would bet the 5C will come larger than 16.
nah – 320.00 is the sweet spot.
hitting the 500 range is not for the average.
In between $429 and $450.
I’ll eat digital crow if not.
sounds fair Jay Jay – eating digital crow is risk less.
5c $250
Apple is not that bad to completely kill competition.
With that price many companies will complain.
Tough on them – that’s business!
If they cant offer a product to compete without reducing prices that’s Apple’s competitors problem.
Get rid of the iPod touch and make it $299 without a contract. If you activate it on a carrier, you’ve got an iPhone 5C. If you choose not to hook it up to a plan then you’ve got an iPod touch. The networks can offer some data-only plans as well, like with the iPad, and those who’ve clamored for a 4G-enabled iPod touch can finally have one.
bingo, suddenly people are seeing the simplified product line
iPHONE & iPAD, each available in 3 sizes
small 4.0″ / medium 7.9″ / large 9.7″
32Gb / 64 Gb / 128Gb / 256 Gb
iPhone has options for network carriers
iPad is wifi only
Have to disagree about dropping the iPod touch–no one wants to pay extra for stuff they’re not going to use. That’s why iPads come in wifi-only and cellular versions.
Exactly! iPodt touch will stay. The cell components will add way too much cost burden.
Anything over $350 will be a major disappointment. If it’s $350 or less, I will buy 3 of them for my kids. If it’s $450, I won’t buy any.
$350 is a LOT of money in India and China. I say sacrifice profit margins for volume. They’ll lock more people into their eco-system that way…
agreed, look at Samsung 4s on sale its down in the 400s already – Apple needs to hit Samsung hard… coming in at 350 would do it WORLD WIDE.
It’s not about profit margin. It’s about total profit. If Apple dropped the price of an iPhone 5C (assuming that’s the name) by just 10% it would have to sell many times the original amount to have the same *total* profit.
Remember, Apple is already selling several 10s of millions of iPhones. Doubling the number of iPhone sales will not radically lower the piece parts costs nor the assembly costs. (Going from hundreds to thousands or thousands to millions does radically lower those costs. Going from 20 million to 40 million does not.)
Apple’s job is to maximize total profit. Looking at the gross margin on just one single item ignores this fact. (There’s no accurate way to determine the “net profit margin” on a single item when a company like Apple is selling many, many different products.)
$379
I think you’re right.
Why the hell is Apple the only company having all these profit problems in order to even stand pat? Is it time for Apple to get out of the hardware only business? Maybe it’s time for Apple to get into the search engine business where profits seem to come easy. Google certainly doesn’t seem to have any problems with profits enough to be debated over whether it’s worth $900 a share. Is it possible the whole smartphone industry is already tapped out for high-end products? There really doesn’t seem to be any clear-cut solutions for Apple boosting its share price considerably with iPhones.
What will Apple cut out of the new iPhone 5C in order to offer it at a price range of $350.00 – 450.00?