“According to a study from Consumer Intelligence Research Partners, 64 percent of all iPhone buyers in the last days of September chose the iPhone 5s. Only 27 percent went for the 5c, which many analysts (including myself) have said is too expensive to play the role of a ‘low-cost iPhone,'” Sascha Segan reports for PC Magazine. “That has led CNBC, for one, to go with the hysterically false headline ‘Nobody seems to want Apple’s iPhone 5c.'”
“But the 5c is performing comparably with iPhones in its price bracket over the past two years,” Segan reports. “It’s obvious that when a new iPhone comes out, most iPhone buyers want the fancy one. The iPhone is a luxury item, and $100 doesn’t make enough of a difference to drive most people to the cheaper model. The 5c is priced just like previous models in this cycle were.”
“Later in the purchase cycle, more sales may shift to the 5c. A less-expensive, non-flagship product is for later adopters, not the day-one buyers,” Segan reports. “An estimate of 11.4 million iPhone 5c sales in a quarter is no mean feat, and according to analysts at Cannacord Genuity, this basically recycled phone is outselling Samsung’s Galaxy S4 at AT&T and Sprint, a feat the older iPhone 5 couldn’t accomplish over the previous few months. Apple probably couldn’t have pulled that off without the new name and look… There’s also no proof so far that the mythically disruptive, low-cost iPhone would actually make money for Apple. Never confuse profit share with market share. Apple makes high-end, high-margin products.”
Read more in the full article here.
Related articles:
Wells Fargo analyst: Apple’s iPhone 5c pricing strategy the right move – October 17, 2013
Wall Street Journal backpedals on iPhone 5c supply chain cuts story – October 17, 2013
Apple ups iPhone 5s orders, ramps down iPhone 5c production, sources say – October 16, 2013
Apple cuts iPhone 5c orders for Q4, says source – October 16, 2013
Why would anyone buy an iPhone 5c instead of an iPhone 5s? – September 10, 2013
But, but, but . . . a tech pundit once said it was a failure and the rest jumped on the band wagon. It has to be true, doesn’t it?
So we should lower our expectations of Apple?
The primary reasons a more expensive item would outsell a lower-priced item is if:
1) build or design quality (not a problem here)
2) critical features missing from cheaper model (not a problem here)
3) Poor distribution & retailing (not the problem in this instance)
4) stying
5) pricing scheme
It would seem 4 & 5 are primary problems with the iPhone 5c.
… and yes, we expect Apple to make mistakes. But we expect Apple to learn and to fix them. Why lower standards?
How is that lowering your expectation?
have you ever heard quality over quantity?
Well if we do lower our expectations for the 5C then what shall we do with our expectations for samsung bury them?
The 5C outsells any of samsungs offerings.
Additionally, given present sales numbers samsung is the only android vendor able to move hardly any phone at all.
So I guess what you are really telling us is that android has jumped the shark, yes?
Wrong, Mike. Most people buying an iPhone in the first week or two after a new product release are rabid iPhone fans — and they want the top of the line model with all the new goodies. Thus, the 5s sold more than the 5c.
The 5c will catch up and likely surpass the 5s as the year progresses because the early adopters will already have their 5s models. People who aren’t that demanding to have the latest, greatest hardware features will buy the 5c, they’ll buy it for their kids, etc.
The 5c is never going to outsell the 5s as long as it is priced like that.
Was just in the apple store buying a 5c for my (teenage) daughter. Nothing surprising there she is perhaps the demographic for that phone however three things were surprising.
One, she would have wanted the 5C even if it were the same price as the 5s (I was actually trying to convince her since I believe the 5s is a much better phone for only a little more $ (she gave me that glassy eyed, head cocked slightly to one side, “really” stare as I explained the significance of 64 bit CPU’s and the sub dermal fingerprint scanner. Nope she had decided on the 5C and no preponderance of superior specs was going to win over the fact that she liked the way the 5C looked and felt much better)
Two (and this is somewhat arbitrary) While my daughter was having the phone set up (and the apps & data from her iCloud account installed, got to love that customer service) I was looking around and noticed that the dozen or so groups sitting around with us (medium size apple store) most of the phone they were setting up were 5C’s.
Lastly I noticed in handling and using the phone the solid & slick (slick as in cool not as in slippery) feel it has. It is really a nice phone (particularly as compared to any samsung I have ever held)
So yeah I wish we could trade Benjamin’s.
I’d take that bet in a heartbeat, the 5c will easily outsell the 5s this holiday season.
Mike,
3 & 4 aren’t the issues here. In fact, there isn’t an issue at all. This is the typical ‘even when Apple succeeds, there must be a problem’ logic at work.
The huge fear was a lower cost iPhone in the line would eviscerate the high end. Apple instead demonstrated that adding substantial value (64 bit leap, fingerprint reader, more memory, unique two-color led flash) led people to prefer the high end model.
In Anatomy of an Apple – the lessons Steve taught us, I predicted exactly this outcome for Apple. The business lessons here are many. There’s a hidden thermometer at work, and Apple just took the temp of their market.
What’s being demonstrated is that Apple hasn’t remotely overshot their market. The drumbeat from the media that Apple will collapse as people flee to ‘good enough’ cheap alternatives was just completely destroyed.
Judging from your posting history, I don’t think its possible for you to lower your expectations of Apple.
——RM
Sascha Segan has always been one of the select few with the patience and comprehension to understand what Apple is doing.
Wow the 5c outselling samsungs best? Incredible! At places spiffs and incentives favor samsung? Way to go Apple 5c!
Keep talking like that and I’ll be able to sell my Apple IIc for a profit someday!
MDN really needs to make up its alleged mind about the 5C. Before it was introduced, MDN said that nobody would want it; why wouldn’t they spend the extra hundred bucks for the 5S; and so on.
So, the 5C is introduced, the 5S outsells it by a wide margin. MDN is right, right?
Then analysts start to see signs of 5C production being reduced, and MDN jumps all over the reports, saying that no such thing is occurring?
MacDailyNews never said that nobody would want the iPhone 5c.
First, never, ever believe analysts’ “supply chain checks” as any accurate measure of Apple’s product pipeline. They’re virtually never correct, particularly so for the iPhone and iPad.
Second, these stories keep referencing “the last days of September” or even just “September”. Considering there was one weekend of September when the iPhone was released, it’s no surprise at all that the rabid iPhone owners, most of whom were scrounging the internet for rumors, photos, following feature updates, watched the unveiling, etc., wanted the 5S with the advanced hardware features.
The 5C will do just fine (it is doing just fine). Apple wasn’t going for a LOW cost iPhone, Apple was going for a LOWER cost iPhone (as in lower than the top model).
There will never be a bottom-feeder, cheap iPhone. Apple won’t compromise on the components that much to bring the price down far enough to be a cheap, low cost phone.
So much fuzz over a non-issue. iPhone 5c lands sells. IPhone 5s lands and sells. Apple is happy. iPhone 5ers are happy.
Let’s move on.
It’s really not good for Apple shareholders when there are people out there constantly trying to undermine an American company when our national trade deficit is so high. The iPhone 5c has been out a little over a few weeks in the U.S. and recently offered to more countries and you’ve got people trying to label it as a failed product. When you think of it logically considering the product is out less than a month, it’s really absurd. How can a product be considered failed when it’s still being sold and not even out for a full financial quarter?
I have yet to hear anyone say anything about actual iPhone 5c sales numbers and yet they’re screaming failure. Even so, I’m sure there must have been products in the past that that had slow initial sales but picked up months later into the product cycle. I never thought a product’s success or failure could be judged only by early sellouts.
I think of 3 things when I read stories like this.
1. Is the lower cost iPhone getting customers to join apple that normally wouldn’t.
2.. Is the lower cost getting people to upgrade from previous misled that would have waited
3. Does the sale of the lower cost help keep the manufacturing costs of the new one down.
Common sense at last!
In la-la-land, Apple gets their strategic advice from bloggers and hit-whore “analysts”. Having invented a “market share” strategy for Apple, they then judge Apple by their own strategy and mark Apple down.
In reality, all these people are living in a parallel universe. They are foolish indeed, but not as foolish as those who pay them any attention.
Why would Apple price the 5c just $100 less than the superior 5s? It’s a proven, old marketing trick – the lower-priced item lures the customers into stores, the small difference in price for a huge leap in quality makes them plonk down the extra to get the higher-priced item. Maybe the 5c is fundamentally designed to be the bait to catch customers for the 5s – and it really doesn’t matter to Apple how many 5c they sell, as long as the potential 5c customer is “lost” to the 5s.
Just wait until the Christmas shopping season. The iPhone 5c will be the iPod touch of this year.
And once again, today’s earnest outcries of looming disaster will be forgotten, by all except those of us whose intelligence was insulted and whose sense of fellowship with other humans offended.
Mike,
3 & 4 aren’t the issues here. In fact, there isn’t an issue at all. This is the typical ‘even when Apple succeeds, there must be a problem’ logic at work.
The huge fear was a lower cost iPhone in the line would eviscerate the high end. Apple instead demonstrated that adding substantial value (64 bit leap, fingerprint reader, more memory, unique two-color led flash) led people to prefer the high end model.
In Anatomy of an Apple – the lessons Steve taught us, I predicted exactly this outcome for Apple. The business lessons here are many. There’s a hidden thermometer at work, and Apple just took the temp of their market.
What’s being demonstrated is that Apple hasn’t remotely overshot their market. The drumbeat from the media that Apple will collapse as people flee to ‘good enough’ cheap alternatives was just completely destroyed.