“Apple’s iPhone numbers are in from its opening weekend (and really, why not talk about this like a movie?) and they are boffo: 9 million units sold,” Sam Grobart reports for Businessweek. “To put that into context, last year’s first-weekend sales of the iPhone 5 were 5 million, so an increase of 80 percent is pretty awesome.”
“Last year is not like this year, for two important reasons. For starters, there were not one, but two iPhones newly on sale this weekend: the top-of-the-line iPhone 5S and the premium-economy iPhone 5C,” Grobart writes. “And while it seems that offering two models instead of just one did juice sales, it did so in an unexpected way: It appears to have made the more expensive model more attractive.”
“Apple doesn’t break out which model sells how much, but analysts and supply-chain watchers are saying the 5S won the weekend far and away. Perhaps some psychology and economic principles are at play here. If you have a new phone, the iPhone 5C, priced within $100 of the 5S, how many people will justify the extra $100 to get ‘the good one?’ Maybe you can attract customers with the lower-priced model, and once they’re on the site, or in the store, for ‘only’ an extra hundred bucks (an admittedly relative term, given what it takes around the world to earn an extra $100), they can get one that doesn’t say ‘I got the cheap one,'” Grobart writes. “But the other, much more important factor in the iPhone’s recent sales success is that this year’s launch included more countries than last year’s.”
Read more in the full article here.
MacDailyNews Take: Yeah, um, this sounds eerily familiar:
It seems to me that Apple is using the iPhone 5c as a tool to push buyers to the 5s (well, at least those buyers who can grasp a simple value equation). Once Apple gets the customer to the websites or into the stores and the prospective buyer can see and/or hold both phones and learn that they’re only separated by a mere $100, my guess is that Apple figures they’ll have plenty of upsales occurring. Upsales that will boost Apple’s iPhone margins nicely. Oh, BTW, Apple’s going to sell a boatload of both models (and millions of 4S units too)! Are you listening, margin-loving Wall Street? – SteveJack, MacDailyNews, September 10, 2013
Related articles:
Report: iPhone 5s out sold iPhone 5c units 3.7 to 1 globally on launch weekend – September 23, 2013
Why would anyone buy an iPhone 5c instead of an iPhone 5s? – September 10, 2013
1) iPhone 5c
2) iPhone 5s
Duh!
3) China + other countries
I bet if you added up the separate launch numbers from these countries when the iPhone 5 was launched it would come a lot closer to the iPhone 5s numbers.
2 year contracts up? Had to play some part
Contracts end every year. I don’t think that would have made much difference.
Not really. Plenty of people are in the middle of their contracts now. Just like last year when “only” 5 million iPhone 5 models were sold.
I just upgraded 4 iPhone 5s from the 4s, my contract just ended. That’s why I didn’t buy the 5.
This is well known pricing psychology. Offer a lower price point model which mentally gives the buyer self permission to buy it, but at time of purchase, the self upsell occurs, usually with a great deal of positive emotion. Funny how that works and Apple has been the master since the iPod days.
true.
Why?
1- There are many in this world without taste. This also explains the existence of TMZ, Faux Newz, WWE, Chevrolet, Fox TV, Rupert Murdoch, MTV and much of the southern US.
2- There are at least 9 million Fanbois out there that would buy a petrified dog turd if it had an Apple logo on it and pronounce it better than the Samsung Turd.
3- There are those who have a desire to be the first to have anything. Yes, there were sad souls in line to buy the X-Box, see the Star Wars films, the Harry Potter films and all the other thing of the moment.
Dude, you need to watch about 10 episodes of “Duck Dynasty” and you will change your mind. Warning: you need to pay careful attention while you are watching. 🙂
PS: Mr Darwin, if you said what you just said in #1 above anywhere within 400 miles of where I am, you would be missing most of your teeth. You are a fool for thinking as you do. Take my advice above, you’ll be better for it.
PPS: Tim Cook is from Alabama and is an Auburn and Duke University graduate. He is the highest paid executive in the world. THAT, by definition, you can’t match.
Graduating form Auburn or Duke does not give one taste- nor does a big paycheck.
nor does posting stupid cr$p on websites.
Take my advice, you’ll be better for it.
PS: Alabama, Auburn and Duke are a VERY big reason why Mr Tim knows how to do what he does. Of course, you are currently too foolish to understand this. Pay attention, I just took you to school.
apologize for the grammar mistake (typed too fast)
Should be:
Alabama, Auburn, and Duke are VERY big reasons why……
Been to school and it wasn’t Auburn or Duke, Junior.
Mr Tim, as you call him, knows how to make the trains run on time. He is clueless as to the vision thing.
You would not know vision if it came to you in a hundred dreams in a row. You are a clueless and rude jerk.
I wouldn’t mind knowing where you went to school to give me the opportunity to avoid others who went there.
@rp
I gotta agreed with Darwin. His obviously high level of taste is evidenced by his poetic and nuanced use of the English language. Obviously a mentor we should all pay attention to on what constitutes “taste”.
Whoa. I stood in a LONG line for the Xbox 360. (Bought 5 of them – long story).
But man that money was well spent. Over the past decade the amount of joy the 360 has brought me has been invaluable.
Same goes for my iPhone(s). It’s been a pleasure.
Get real Darwin. This isn’t the original iPhone; it’s a couple of evolutionary upgrades that nearly sold twice what the iPhone 5 did last year. That has nothing to do with being the first Fanboy to own one; that ship has long, long passed.
Now please go and actually evolve some.
Hundreds of millions sold with the old UI. ( million with the new. Apple has also stopped sining iOS 6 so people who downgraded to iOS 7 cannot upgrade o iOS 6.
Darwin. You sound over medicated.
I find it sad that you are so cynical and have no tolerance for others’ perspectives or preferences. The people that live in the south or like the things you relegated to second rate tend to think that people like you are high brow snobs and are going to drown if it rains. Lighten up on the world and live a little longer and without the heartburn meds dude…
Intolerance, condemnation, ridicule, and smugness have been proven to to be effective instruments of communication, demonstrated by their singular role in facilitating diplomatic negotiations, forging amicable separations in marriage counseling, enhancing learning through engagement, building strategic alliances, and conversing with the traffic cop who just pulled you over.
Yeah, those’ll work.
Your true colors for all to see. Your about as “evolved” as Miley Cyrus …
1. iPhone rocks!
2. iPhone rules supreme.
* Knowledge Reigns Supreme.
** But the iPhone does, indeed, rock.
I always have to go through the process of justifying a purchase. Is it good value? Does it make sense to go for a cheaper item? Sometimes yes. For the iPhone I will be going for the 5S because the additional cost is minimal after trading in my 4S (via gazelle or equivalent).
This.
Prior to this year I’ve always kept my previous iPhones as iPod with an emergency calling feature.
This year, trading in my 32GB iPhone 4S at AT&T allowed me to get the Space Grey 64GB iPhone 5S they had in stock on launch day PLUS a free case and a free extra lightning cable to plug in at work.
I got all that for for far less than the $300 I intended to spend to get the 32GB version.
I could have traded my iPhone 4S straight up for a 32GB iPhone 5C with zero upfront but it was drop dead simple for me to spend less than I intended for far more than I expected.
TouchID is crazy convenient for unlocking the phone. This is the phone I have wanted since the first iPhone was announced in 2007.
Now I just have to wait for LTE Advanced + 802.11 AC to show up in a 128GB or 256GB iPad with a 600 ppi+ 13″ screen.
Well, early reports so far are that the iPhone 5s is taking the top slot in China, so who really cares whether or not the 5c does well there?
Plus the evaluation that the 5s is a mere $100 from the 5s is only useful to a newcomer to the platform. To someone upgrading from an earlier iPhone, that $100 difference is a choice between a little more Apple tech and a lot more of something else, maybe even iTunes content. Sure there are a lot of people who demand the latest and greatest Apple is making, but for lots of long-time users the 5c is plenty good enough as an upgrade. They are not Android settlers, they are iPhone-smart and money-wise.
If 5c is driving midrange buyers to 5s then 5c can also drive low end buyers to 5c
It’s all about subsidized market or not. In developed countries iPhone 4s buyers will prefer to pay 99 instead of 0 to get the 5c, in emerging, iPhone 5c buyers will prefer to pay 699$ instead of 599$ to get the 5s. At the end, sales of 5c & 5s in the product mix will significantly improve the margin.
Apple only sold 9 million iPhones because they could not get 18 million made in the same amount of time.
Again, what ever Apple gets made is what they will sell.
exactly
Why would anyone believer analysts when they say more 5s than 5c. Although I believe it is the case, it has nothing to do with what analysts are saying. Their track record, sniffing go supply chain tea leaves and mass hysteria is pathetically and consistently wrong!
Who will buy a $99 phone? Weren’t about 40% of iPhones sold last quarter the 4S, …at $99? Seems to me the 5C will meet the needs of the $99 purchaser that would have bought the 5, and attract those who like the colors and “fun” message. The 5C is going to turn up on a whole slew of family plans this holiday buying season. The kids will love it.
Agreed. Analysts and bloggers screamed at the top of their lungs that no one in the U.S. would pay $500+ for the original iPhone when it came out, yet Apple couldn’t keep them in stock either.
Number one rule of business: Provide something that people really, really want and they’ll buy all you can provide.
This isn’t complicated people:
4s-8gb $0
5c-16gb $99
5c-32gb $199
5s-16gb $199
5s-32gb $299
5s-64gb $399
Once you decide to buy an iPhone there is a price point for you. The 5c is an updated model from last year, and you get something extra: lots of color combinations to make if look like you want. It isn’t that hard people. The key is to make really great phones so a 24 month old one isn’t a “kluge”. The 24 month old 4s is still a great phone and still will be 24 months from now when it is 48months old. The high end 5s-64gb will be still the best phone in the world in 24 months. So on both ends and everything in the middle everyone will perceive and get real value with their Apple purchase. This is the “secret sauce” that makes Apple the leader. How do they do this? Attention to every detail of design, implementation, manufacturing and customer service. It ain’t that hard to figure out. Doing it year after year IS hard. Thank you Tim, Jony and the rest of the people at Apple. 🙂
My feeling is that the new 5S and 5C exist partly due to supply and customer satisfaction issues revolving around the glass backs. The iPhone 5’s all glass design was a well documented breakage issue and that likely means Apple exhausted their estimated replacement supplies and was none too interested in losing profits manufacturing another round. Changing the 5C to plastic allows Apple to use up existing 5 guts, offer more choice, and positions it to eventually replace the iPhone4 as their entry level device. It’s a slam dunk in terms of internal business decisions as it eliminates a problem and creates something new. Also, don’t forget, a basic rule of sales is never underprice a product as you can drop the price later. The price of the 5C will drop as time goes by and eventually be offered “free” with a contract; becoming quite compelling as a purchase item, China notwithstanding.
What you say makes a lot of sense. Refried beans with some new sauce added. Nothing wrong with leftovers if they taste good. Although I would prefer the 5s, I don’t see anything wrong with the 5c for first time smartphone users. However, I do believe Apple will eventually (soon) drop the price of the 5c if the iPhone 5s continues to be the hot seller. Apple will then balance whatever profits the 5s makes with 5c price reduction losses. I just wonder if maybe it’s not the price that’s the problem. Maybe the plastic 5c is just not what consumers expect from Apple and I hope that isn’t the case. I’ll wait until the Christmas holidays to see if I’m guessing wrong.
I don’t know LB, I think it’s the price and not so much the plastic that held the 5c back this past weekend. The $249.99 price I posted on another thread is a bit ridiculous, I’ll admit. But if they had priced it at say… $349.99 off contract, I’m sure the 5c would have kicked some pretty serious butt last week. It’ll get there sooner or later, so no big whoop. It’s a beautiful phone and really shows off iOS 7 like none other. I love it, but can’t afford it… Yet.
Go apple!
Why is nobody paying attention to Morgan Stanley analyst Katy Huberty’s breakdown of that 9 million sold?
“We estimate the breakdown of the 9M [9 million] first three days’ sales as: ~3M iPhone 5s sell-through (with real demand closer to 6M), ~4M iPhone 5c sell-through, and ~2M iPhone 5c non-Apple retail inventory build (representing 1-2 weeks of inventory)”
Looks like ~3M iPhone 5s and ~6M iPhone 5c, garnished by an unconstrained ~12M ribbon and little hat. Maybe the squiggles have me cross-eyed, but the 5c looks very strong.
Spec-wise, the iPhone 5c is an upgrade from the iPhone 5, which it replaced.
The pricing model is still the same, (uncontracted prices listed) $450 for 2 years ago, $550 for “last years” (in this case a spec bumped 5 in the form of 5c) and $650 for the current.
So while it looks more “like a toy” (to quote others), it’s in line with what Apple does every year, except in this case you get a few pieces of better hardware (larger battery, broader LTE compatibility, and an improved front facing FaceTime camera with backside illumination sensor for better low light shots) for the same price as what the iPhone 5 would have been selling for.
Your argument is fine, that *you* can’t see why anyone would spend $100 less for last year’s tech, but clearly Apple has been doing this for years now and the other models continue to sell and offer a value proposition to some people. In this case the 5c is just a better value proposition than simply dropping the price of the 5 would have been.
All these discussions assume that all sales were for the new customer, or trade up eligible, subsidized price. Not being of sound mind and not being eligible for an upgrade, I paid full boat for a 64Gb 5S….because I wanted the latest and top of the line iPhone model the second it was available. How many others were in this “gotta have it” category?
1. You’re assuming $100 is not a lot of money for someone to pay. In many parts of the world, that is huge. Plus, in many parts of the world, phones aren’t subsidized, so the spread between 5c and 5s is even greater.
2. You’re assuming the person has only mildly outdated tech that they are upgrading to. What about the person moving from feature phone (or no phone) to an iPhone? Then the 5c seems truly magical and is within their financial reach where the 5s may not be.
3. People keep saying the 5c is “old tech” or “last year’s tech”, but even that is very advanced stuff coming from Apple. The 5c is much more of a world phone than even the 5 was because it will operate on far more networks.
4. There is still fantastic value in the 5c. iPhones are much more rugged and last longer than Android phones, and I fully expect the 5c’s plastic body to be much more durable than anything from Samsung, meaning a person doesn’t have to worry that their new phone (for which they may have paid $550 or more for) will crack and break a year after they bought it.
The (more than) 9 million number is for sales of iPhone 5s and iPhone 5c. If you include the third choice iPhone 4s, plus iPhones sold from last year’s lineup in markets that did not get the new iPhones last weekend, Apple’s total iPhone sales for the 3-day period may have exceeded 10 million.
Producing 6m iPhone 5s units for launch was amazing. For such a complex device to have that many available was very sweet.
Explaining why Apple sold a boatload of iPhones at launch is one thing. Analysts trying to explain why they missed their estimates is another. They had all this data (China, two models, more countries) and they absolutely blew it!
Don’t forget that the iPhone 5, while great to begin with, has been further and not insignificantly improved in the 5c iteration. It has better camera, bigger battery and, yes, comes in colors that are important to a lot of people. And it is $100 less. An attractive package overall.
People are becoming more educated in their decision making and are paying less attention to the sales guy.
Apple’s videos (becoming more popular with each release cycle) demonstrating the deeper value are also helping.
The 5c is designed to push adult buyers into the 5s. Apple figured out that if they kept the 5 as the low priced option, like they didi when the 4s was released, many people will opt to save the hundred bucks and still get a new iPhone that looks like the newest model.
This time Apple made it less attractive to save the hundred bucks buy making the cheaper ( 5c ) option less appealing to the adult buyer. How many business men are going to choose for the bright green phone?
You’ll also notice that the 5c isn’t available in black.
These people at Apple are wicked smart.
Why doesn’t Tim Cook release a statement regarding last weekend’s iPhone sales? That way there wouldn’t be any misunderstandings. That way manipulators like Gene Munster would have to find another way to discredit Apple’s achievement. I know Munster won’t go away quietly, but it might just totally damage his credibility as an analyst and expose him as a charlatan. If the analysts want to go to war with Apple, then Apple should go to war with them. Any time they make false statements, Apple should set them straight. Isn’t that what public relations is supposed to do. Apple doesn’t appear to do very much in the way of damage control. Of course, if Apple is constantly buying back shares on every dip, I have nothing to say except they can just continue to do their thing.
Apple is letting them hang themselves.
“but it might just totally damage his credibility as an analyst and expose him as a charlatan.”
Damage the credibility as an analyst? Ha!!!
As an analyst you can say things like “the mouse will never catch on” and “”Apple should pull the plug on the iPhone . . . I’d advise people to cover their eyes. You are not going to like what you’ll see.” and you will still be making lots of money. The more outrageous the better.