“Investors should ignore supply chain noise about the iPhone 5c and trust that Apple made the right move in maintaining its margins, one prominent analyst said on Thursday,” Neil Hughes reports for AppleInsider.
“Maynard Um of Wells Fargo Securities believes Apple’s pricing strategy with the iPhone 5c, making it the company’s mid-range phone with a $99 on-contract price, will pay off in the long run,” Hughes reports. “He noted that last year’s mid-range smartphone, the iPhone 4S, saw its sales ramp up heading into November and December, as more casual buyers showed interest during the holiday shopping season.”
“If Apple had taken lower margins and hoped for unit volumes to offset, there would have been “no guarantee of price elasticity driving volumes,” he said. In addition, a cheaper iPhone 5c may have resulted in even greater margin pressures as Apple transitioned to its next models in 2014,” Hughes reports. “‘We believe the certainty was the right choice and would not necessarily discount demand yet,’ Um said.”
Read more in the full article here.
MacDailyNews Take: Again, a major target for iPhone 5c are the disillusioned Fragmandroid settlers as they come off contract (God knows they’d never pay a cent to get out of their mistake early). iPhone 5c is not a phone for which anybody lines up at launch. iPhone 5c will have consistently good sales over time. iPhone 5c is already selling better vs. iPhone 5s than iPhone 4s did vs. iPhone 5.
Also, with its pricing, it’s likely very effective in upselling iPhone 5s.
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