“Verizon said it activated 4 million iPhones from Apple in its first quarter. The good news is that is 25% year-over-year growth,” Chris Ciaccia reports for TheStreet. “The bad news is that people are still flocking to older phones.”
“On a conference call Thursday, Verizon Chief Financial Officer Fran Shammo said Verizon sold 2 million iPhone 5s units during the quarter, with the other 2 million being 3G devices (read iPhone 4 and iPhone 4S),” Ciaccia reports. “It’s important to note that the market still wants Apple products, but they are not seeing any major difference between the iPhone 4, iPhone 4S and iPhone 5 in terms of added benefits that would make them upgrade.”
Ciaccia reports, “This may also be another sign that Apple needs to come up with a cheaper iPhone, unless it can demonstrate major innovations to the devices. People want to own Apple products, but they are not willing to pay for them if there isn’t a perceived reason to do so.”
Read more in the full article here.
MacDailyNews Take: We don’t get it, but perhaps we’re too close. After all, we know everything there is to know about each iPhone model.
To us, the speed of LTE, the lightweight design (iPhone 5 is 20 percent lighter and 18 percent thinner than iPhone 4S!), the markedly larger screen, the noticeably faster A6 processor, the dual-band Wi-Fi, the improved front camera, the improved video stabilization, the ability to take still photos while recording video, the included, much superior Apple EarPods, the rear microphone, etc. add up to easily make the iPhone 5 a no-brainer, especially considering that, with a two year contract, what you spend upfront on the phone averages out to only a few bucks difference per month.
A 16GB iPhone 5 costs $199 with a two-year contract. A 16GB iPhone 4S costs $99. An 8GB iPhone 4 (no Siri, just an A4, etc.) costs $0. Over the 24-month life of the contract, the iPhone 5, with all of the improvements it offers, costs just $4.16 per month more than an iPhone 4S and just $8.29 per month more than a lowly iPhone 4! Of course, the longer you go past the initial two-year contract, choosing the superior-in-every-way iPhone 5 will cost you even less per month.
Listen, if $8.29 or less per month is a meaningful amount to you, then you can’t afford a smartphone.
As anyone who owns an iPhone 5 can tell you, it makes all other phones, including older iPhones, seem thick, heavy, unrefined, and slow by comparison.
Are people just unable to make simple value judgements and/or have Apple and/or the carriers failed to explain why iPhone 5 is the blatantly obvious choice?
There is a marketing problem at Apple.
“It’s important to note that the market still wants Apple products, but they are not seeing any major difference between the iPhone 4, iPhone 4S and iPhone 5 in terms of added benefits that would make them upgrade.”
This isn’t a reason for a “cheaper” iPhone. It just illustrates that handset function has hit a value wall.
A new, as yet unreleased” function is needed to drive high end sales. Digital wallet with fingerprint authentication and iMessage encryption anyone?
To go along with my iPhone 5, I just bought a brand new Glock 21 .45 ACP.
Concealed carry, don’t cha know.
My little celebration of Obama’s new lame duck status! Oh, happy day!
The Grand Old Party, taking back the U.S. Senate in 2014!
ESAD.
That’s a gorgeous gun:
http://us.glock.com/products/model/g21
Enjoy!
The Goob hath ruled your comment childish and unrelated.
Begone troll!
The Goob thusly banishes you forthwith to thine dimension of origin.
Not a Marketing Problem! Apple Tech Lovers who consider this phenomena of not advancing forward have lost site of the mass users. Steve didn’t and the best thing to do is slam these old phone users in the same manner that the specked out droids are slammed. Just because they have the latest and greatest doesn’t mean that everyone wants it or needs it. Yes I am a techie, but I still recognize the masses who want function but not every bell and whistle of even the latest iPhones. Still Apple has to produce and advance forward. They (Apple) are just able to do what droid makers can’t – hold onto a wide wide base of users without fragmenting them!
Grannys and Grandpas are getting the iPhone 4 as they don’t need all the power of the 5. This IS Apples cheap, entry-level phone for the masses.
I have to say I really enjoy my iPhone 5 after I purchased a handful of dock adapters.
yep, got my mother in law a refurb 4S for $50. otherwise it would have been a free Galaxy S2. but radio shack was out of S2’s.
my father in law has a galaxy s3 and calls it an iphone
Isn’t that a pisser. I had someone ask me if they should buy a Nexus iPad. Sometimes it’s hard not to just scream.
I thiink it is also the smaller screen. I love the size of my 4S. E iPhone 5 just feels too big in size not weight of course.
I agree. Honestly the iPhone 4/4S seemed better made, more along the line of Apple’s reputation for quality products. The iPhone 5 seems kind of cheaply manufactured. Was the weight of the iPhone 4 really that much of an issue?
Battery life is one reason to get one. We run out of juice in 20 -40 minutes. Always have to have it charging.
KR, Just not sure how you could run an iPhone out of power in 20-40 min. … Unless you are trying to jump start your car with it….. In that case… Stop that!!!
It’s that really popular defibriltor app everyone’s going nuts over…
de-fib-ri-la-tor 😉
I usually run my juice out at he ten minute mark. You putz.
My experience has been that the iPhone 4 had better battery life than my iPhone 5.
Customers looking for a bargain would rather have an old iPhone than a new Android.
“Its the economy, stupid”. People are very price sensitive in times of economic stress. This shouldn’t be surprising. 99% of the public don’t worship technology (iPhones) for technology’s sake. So while I and many people on this site are willing to forgo other expenditures to get the latest shiny Apple, the overwhelming majority have great job insecurity and income anxiety. They really do need the cheapest version. We should be glad they’re sticking to iPhone and not jumping ship to Fragmandroid and stop chastising them!
Agreed. I don’t care what model iPhone they’re buying, so long as it’s an iPhone. Apple and the carriers need to step it up a notch in terms of advertising, though.
Indeed. And this is the USA we are talking about here. A very strong economy with high earning potential. Imagine the culture in a quasi-third-world country. Best-at-a-premium is not always the going to cut it.
Very strong economy? Man, you need to park your LEM and get back to earth.
Lunar Excursion Module? Nice one!
And by Earth I assume you meant good ‘merika?
Damn it !!!
“good old ‘merika”
I am starting to think that English is not my first language.
similar to economics not being your forté.
Agreed. Apple is scorned for not have a low cost iPhone, but when people choose to take advantage of low/no-cost iPhone 4 Apple is once again scorned for not being able to convince these people to buy the iPhone 5. Dear analysts: you can’t have it both ways. Don’t clammer for a *cheap* iPhone and then turn around a blast Apple for people choosing them. I still have my iPhone 4S. It’s a great phone. Since I don’t have an LTE phone I don’t know if the contracts for the higher speed network is higher. Are the 2 year service contracts for iPhone 5 higher than iPhone 4?
What is the difference , don’t even want to pay another 199 ?
The iPhone 5 is such a major step over the 4s. I could not believe unless I got my 5. After one minute I did not want to go back to the great but heavy brick called iPhone 4S. Who has thought that it was possible that an iPhone 4 or 4S would feel heavy like a brick one day? What a huge difference the iPhone 5 is, I love it.
(Tim, don’t forget the MacPro, please. And the new versions of Pages and Numbers. Thanks in advance.)
Analysts expected a higher increase; AAPL pummeled….
“This may also be another sign that Apple needs to come up with a cheaper iPhone…”
Exactly. Apple MUST come up with a phone that costs less than the $0 iPhone 4!
Why? Nobody really knows. But they MUST!
iPhone 4 costs $450.
not in the USA
i can add an iphone 4 for $30 a month to my plan for $0
You are paying of a loan for a $450 phone. And, mind you, you are actually overpaying it (at least with Verizon, Sprint or AT&T). The monthly subsidy amount on your plan is about $20 for each iPhone, and you’re required to pay this subsidy for 24 months, overpaying or your phone by at least $30 at the end of this period. To add insult to this injury, none of these carriers will lower your monthly rate once the phone is paid off; you continue to pay full monthly plan, thereby donating free money to your carrier for a phone you have already paid off. The only way to avoid this is to upgrade the phone on the first day of eligibility (i.e. after 2-year contract is complete).
Only T-Mobile now has plans that don’t do this. You buy the phone upfront (either pay full price, or take out a zero-interest payment plan with T-Mobile), and pay for a cheap monthly plan. As soon as you paid off your phone, your monthly bill goes down (by the amount of that installment payment, which is $20 for the iPhone). You can upgrade any time you want, there are no two-year shackles and you’re free to switch carriers any time (after paying off the rest of the loan balance for the phone). There are no early termination fees.
Perhaps one day the rest of the carrier industry will adopt this concept.
Guys, it’s simple. The iPhone 4 and 4S are just too well designed.
Dresden, I agree. They are still beautiful pieces of technology – the screen quality is almost as good as the iPhone 5 and the extra pixels must not matter to them. Apple should just kill the iPhone 4/S altogether and introduce a new model for the low(er)-end market (maybe the supposed plastic iPhone). Then the difference between the low-end and high-end iPhones will be much more apparent.
Most of the world (especially the US) lives paycheck to paycheck and by slowly going into credit card debt. Even people who make good salaries are in this boat. To them, there’s a huge difference between $200 and $100 and $0. Sure, it’s financially long-term stupid, but people like this don’t think long-term, they think about how they make it to their next paycheck, mostly due to terrible financial managment skills and lack of knowledge.
Sure. And maybe many of those who buy iPhones are not the going-into-debt types. Therefore they exercise restraint and don’t go all out. Also, phones are a bit of complicated purchase in that they are by nature semi-disposable. What I mean is, there is fairly real risk that that phone is going to get dropped, stolen or soaked at some point. A little different from an iMac, or even an iPad. Therefore the inclination to “just take the cheaper one” can be a bit stronger (I think).
This tells me that many people prefer smaller screens, and iPhone 5 is just too big. I have certainly heard this from several colleagues / friends (most of them women). “It’s just too long, I like the shorter one” was the common argument.
For every one person for whom “bigger is always better”, there are ten others for whom size doesn’t matter…
I wonder what BLN thinks about this issue?
I have never wondered what BLN thinks. Are you feeling okay? 😛
BLN thinks?
Agreed. We just bought an iPhone 4S for a pair smaller hands. Although I generally go for the latest tech, I just no way I could say that a taller phone was better for her.
You might also want to know what the spiff is for each phone sold it may give you an idea why it sells so well.
I suspect it is the salesmen. They push the iPhone 4 and 4s because the iPhone 5’s sell themselves.
Also, they may have limited supplies of iPhone 5’s on hand or get higher profit margins/commissions on the earlier iPhones.
Does anyone actually listen to, or even talk to, those cheezy kids who work at cellular stores anymore?
Who even goes to a cellular store anymore? I went into one years ago looking for something like a case or charger and was immediately overwhelmed with the cheese and high pressure sales crap. Like walking onto a use car sales lot.
Well I upgraded to 4S (from 3S) last month and the reason why I didn’t go with iPhone 5 was the size, 4S has PERFECT size for me, 5 is too big for my taste, it was really that simple.
I see a couple of sound reasons here. First, there’s an anti-Apple marketing campaign designed to make people feel as if Apple’s products are absurdly excessive (this campaign likely propagated by Samsung, I suspect). People feel guilty about getting the best smartphone, especially when they can’t justify acquiring added technology they don’t believe they’ll ever need.
Second, the majority of people do not need smartphones, don’t even want to learn how to use them adequately. Nonetheless, people want to buy a smartphone because to not have one is a social stigma, much like owning something less than an iPhone is also some sort of a social stigma. People who own something less than an iPhone must find a telephone booth to hide in before they use their smartphone in public.
Referrals (word of mouth) by those enthused who need and use smartphones drives the range of social choices for the marketplace?
MDN’s list of all the advantages of the 5 are, ironically, a great illustration why people aren’t buying it over the 4S or 4.
Remember, we’re talking about a HUGE number of general folks now. Do they care about these things? No.
It’s like a motorbike that has a top speed of 150 and another at 170 — it just doesn’t matter for most folks. I certainly don’t care that it’s 20% lighter and 18% thinner. I already don’t notice my 4S in my pocket.
When my 4S contract expires I’ll see what Apple has out at the time, but I see no advantage to that extra half inch in height. Just makes the top of the screen out of reach of my thumb. A thinner 4 might be nice, but otherwise the dimensions are just design perfection.
Price doesn’t come into it. I got my 4s after the 5 was announced, but before it became available in my country. I decided not to wait.
Let’s face it, LTE is too darn fast for some people. Especially if they have 1.5Mbit DSL at home. 😛
And then there is the ADAPTER change.
Yes, it’s probably superior, but we have like 5 original iPod cables kicking around the house. Not to mention in social situation like work, a bar or a friend’s house.
So: adapter change + taller + 100 bucks = older model
Some people just don’t use the new features, and probably don’t even need a smart phone. Doesn’t bother me a whole lot, Apple’s margin is probably higher on the older models anyway.
Funny MDN remark about the 5’s screen size. The MDN app doesn’t even support it…
I am usually glad that I have an iPhone 5, except on occasion when its size feels particularly annoying.
Perhaps a lot of people get the iPhone 4 because the new one is too big. If they made an iPhone 5 that was the same size as the iPhone 4 I would pay the early trade-in penalty to get it.
P.S.
AND I am a male with large hands. My glove size is XL.
It’s not the cost over the life of the contract, it’s the out of pocket money. People don’t look at it as an extra $4/mo. for an iPhone 5, they look at saving $100-$200 right now and still getting most of the iPhone goodies. And let’s face it, Siri is not the rip-roaring success some (MDN) would have you believe. Siri frankly can be very agitating to use at times because it doesn’t get things right.
Also what you’re seeing now is a lot of teenagers and preteens getting iPhones, so parents buy a lesser expensive model for them.
Besides that, not everyone wants a larger screen. Many of us think the non-iPhone 5 screen is a great size, or that it doesn’t justify an additional $100.
Has anyone even considered the cost of having to buy ALL new accessories when you pick up an iPhone 5?
That new connector means: new car chargers, new home chargers, new TV adapters, new external battery, new docks, etc.
This also needs to be considered when figuring the cost. Maybe you don’t need all of these, but you will need some of them.
Sounds about right I bought iphone 5 but advised my brother to buy iphone 4. Unless you are a avid iphone gamer, which I am, or really care about HD video iphone 4 is enough for most people.
The 5 is marginally better in every way, but the jump in cost can only be justified if you desperately need a particular feature. Also disagree about 4G which is basically an excuse for the telcos you rip your face off, 4g only makes sense if you can get non-capped data, otherwise Netflix is an expensive habit.
Aside from price sensitivity, part of the problem may be the sales people at Verizon. When I got my old iPhone 5 at the local Sprint store, the sales people were not just unenthusiastic, they practically tried to discourage me from going with Apple. They had issues with the fact that many customers don’t understand that Apple handles customer support.
They were not going to sway such a determined Applehead, but a less informed customer could have been more easily dissuaded. That lack of enthusiasm, plus the conflict of interest that carriers have because of representing competing brands, often means customers are not energetically urged upwards from the 4/4S to the iPhone 5.
Personally, I don’t really like the iPhone 5 form factor as much as my iPhone 4. And I actually prefer the design and weight of the 4 too, call me old fashioned but it feels like its worth the amount you paid for it. I don’t get that same feeling of quality with the iPhone 5.
The camera on my iPhone 4 is actually better in some ways than even the iPhone 5, if you don’t believe me do a low light comparison. Overall obviously the 5 camera is better, but in certain situations it is inferior.
Extra length make a big difference, as by the time you have the keyboard up or title bars your usable/visible screen can become tiny. In such situations the iPhone 5s screen has massive impact on useful screen. Also the same for touch games, now playing FIFA I can see footballers running about, rather than watching my thumbs move around.
I think a lot of the reason falls on the carriers and their staff. One of the biggest things with the iPhone 5 is 4G LTE that most carriers have not built out to the point where it is everywhere (like where I live for instance). The other is the staff at the stores. They push everyone who comes in to a free android phone because they make more money on it. So after being shown a barrage of crappy free android phones the smart customer still wants apple but now has a hard time justifying the $200 price.
Isn’t this saying what everyone is saying? Apple doesn’t need a cheap iPhone, this is proof of why. If they want a cheaper iPhone they can buy a 4 or a 4s.
Not everyone wants the newest tech, they might just want something that is easy to use and good on them. For example my grandma wants a new phone, will I tell her to get the newest and best once she does, no. She’s 88 and wants it for the ease of use not the fancy tech.
No one complains when people bought Macbooks insted of MacBook Pros so why is this different?
For a lot of people, any iPhone will do everything they want in a phone. The 5 may be better, thinner, lighter… …but contacts, mail, web, camera, music and apps, with Apple’s ecosystem work well enough on the 4 and 4s. (heck i still use a 3G). Also, for many of these buyers this is their first iPhone (Apple is still increasing market share in the US) and even the 4 is a huge advance for anyone coming from a feature phone or an old Android device. I have a friend who is considering buying an iPhone. She has an ancient, tiny, plastic Samsung feature phone which she rarely uses. She is retired, doesn’t use social media and has both a windows laptop and an iPad. The tiny plastic phone fits in her smallest purse and the size of even the iPhone 4 is a potential nuisance. She has a $10/mth plan which is more than adequate. She is considering an iPhone because she loves her iPad, but…
For this reason, and others, Apple’s strategy of offering the 4 and 4s at lower prices makes sense. Users who don’t see the benefit of the 5 nevertheless enter the Apple ecosystem and learn about the iPhone and discover uses they never imagined. Some, perhaps many, of these new Apple users will upgrade to the latest iPhone next time around.
Simple, there is no huge difference between a free phone (iPhone 4) a $100 phone (iPhone 4s) and a $200 phone (iPhone 5) *on contract*
So, if selling old devices was such a bad thing for Apple, why are they selling them? The people who are buying those phones are the EXACT reason Apple still makes and sells its older models. Everyone who was clammoring for a low-cost iPhone model neglects to see these phone options, but they’ve been there all along. Now that people are buying them, this is somehow a bad thing for Apple? I’ll never understand the press. Damed if they do; damned if they don’t. Meanwhile, they just keep making money hand over fist. Whatever.
I have a handful of MacBook Pros, MacBook Air, couple of iMacs, so I think I could afford an iPhone 5 if needed – but my 4 is doing everything I want. I do not feel any inclination to get the 5. My 4’s contract expired, and I was going to get the 5, but thought I would wait for the large-screen iPhone 6.
I also haven’t yet bought an iPad because I need devices to get real work done. Sure, there are many, many, many businesses that use iPads – but the iPad shines for business-activities that rely on display, e.g. showing a presentation on the go, or quick simple communication like emails on the run.
Whereas I do lots of heavy duty writing and working on different client matters, and there is no way that the iPad’s mickey mouse filing system suffices for real office use.
I am advocating that iOS has an option to switch between village-idiot-mode and expert-mode.
Rather than not having a Finder, the iOS could be on village-idiot-mode by default. Then, a more advanced user can turn on the expert mode to reveal a Finder. In this way, in the idiot-mode, the Finder is only storing files within its app area — but the expert mode can allow normal Finder storage.
Then you link that iOS Finder to the Mac’s desktop via iCloud like Dropbox.
That’s how Apple could treat its users as having some intelligence while also catering for the village idiots that are needed to grow its stash of cash.
Instead of all of you talking down on people and their financial decisions they make or that a smaller screen is best, try thinking from the regular Joe’s situation. They had a dumb phone or an Android but liked Apples Ecosystem. They finally saved some money or was time for an upgrade or they were using prepaid plans. They decide it’s time to get an iPhone, so they walk into the wireless carrier of their choice but their credit makes the iPhone’s upfront cost more, so they buy an iPhone 4S or 4 at the lover rate until they can afford a newer model. I know several people that stated this to me in person.
To me it seems that these facts Mac Daily News are presenting here should be printed out on a sheet and sent to all stores that sell iPhones by Apple.
I had actually no idea about the feature of taking pictures when recording video. I must have missed something in the presentation.
I remember a while back when the iPhone 5 was new I had a conversation with my uncle. He had been to a store to look at the device and asked the sales rep a few questions a out the device. He later asked me what was “better” with the new device. I paused for like 10 seconds while thinking and my uncle said: Yea, that’s what the sales rep did too…
I tried to explain that my pause was not because ther wasn’t any significantly new with the iPhone 5 but rather I was thinking about what would really matter to a “normal” person, like my mom or something. I mean, it got the A6 instead of the A5 ok how would that really matter to my mom. Here App to check the buss schedule loads 0,5 seconds faster? More memory, ok that is good but does not make the world of difference. Faster connectivity, ok but no one can notice the difference between 3G with 42 Mbit and 4G with 80 Mbit it’s all theoretical anyway. Faster WiFi its good but nothing that will everyone needs. A larger screen is the biggest feature people will notice but its not much bigger so its more a small upgrade. It’s not that I personally don’t think the iPhone 5 has a sea of improvements but that for me and everyone else that really cares about technology. These are all good improvements and significant technogy advancements but A5/A6 for most people it does not matter to the. Sadly. That’s why I believe the iPhone 4 and the iPhone 4S still attracts allot of people since they are being discounted. Apple might have to explain even better why people should buy the iPhone 5, 5S or 6.