“Apple sold a record 51 million iPhones in the fourth quarter of 2013, but acknowledged it had underestimated the appeal of the flagship iPhone 5S, making some analysts question the new two-model strategy and arguing that Apple had erred in pricing the iPhone 5C,” Gregg Keizer reports for Computerworld. “‘Cook signaled a couple of things on the call,’ said Ezra Gottheil, an analyst with Technology Business Research, in an interview after Apple wrapped up its conference call with Wall Street on Monday. ‘He essentially said, ‘Oops, the 5C was a mistake.””
“During that call, CEO Tim Cook acknowledged, albeit in carefully-couched terms, that the mix of iPhones sold had included a larger percentage of the top-dollar iPhone 5S than Apple had anticipated,” Keizer reports. “‘It was the first time we’d ever run that particular play before, and demand percentage turned out to be different than we thought. We sold more 5S than we expected,’ Cook said, tacitly admitting that the other model, the lower-priced iPhone 5C, under-performed.”
“In September, Apple unveiled two new iPhones for the first time, the top-end iPhone 5S and the middle-tier 5C. The latter was a repackaged iPhone 5 in a colorful plastic case that was priced $100 less than the 5S,” Keizer reports. “While Apple never splits out iPhone sales by model, the jump in the ASP (average selling price) strongly hints that the mix tilted toward the iPhone 5S. The smartphone’s ASP jumped from $577 in 2013’s third quarter to $637 in the fourth and nearly matched Q4 2012’s $642. While that was good for Apple’s bottom line — it booked $13.1 billion in net profit, equal to what it recorded in the same quarter the year prior — it made some wonder about the iPhone 5C strategy… ‘I think that the next time they bring up a less-expensive iPhone, they’ll use a bigger price separation between that and the newest,’ said Gottheil.”
Read more in the full article here.
MacDailyNews Take: That Apple didn’t see this obvious issue with the iPhone 5c pricing/feature set indicates there may be a issue with Apple management’s vision.
The iPhone 5s is separated from iPhone 5c in many ways: Touch ID fingerprint recognition, materials quality, the camera’s larger 8MP sensor with 1.5µ pixels, ƒ/2.2 aperture, dual LED True Tone flash, Burst mode, slo-mo video, improved video stabilization, a 64GB option, and, of course, the A7 chip with 64-bit architecture and M7 motion coprocessor.
Unless you’re allergic to aluminum and/or fine craftsmanship, there is no reason why anyone who can afford an iPhone would not buy an iPhone 5s (unless you’re buying a first iPhone for your son or daughter). Even then, if you want a brightly colored polycarbonate phone or some feeling of extra protection from drops and dings, slap a plastic case on the iPhone 5s. There, it almost weighs as much as the 5c now.
The bulk of any smartphone cost is the data, not the phone.
Am I missing something or is the price difference between the iPhone 5s and the iPhone 5c too insignificant to ever consider opting for the 5c?
Why the hell would anyone buy an iPhone 5c instead of an iPhone 5s?
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. — SteveJack, “Why would anyone buy an iPhone 5c instead of an iPhone 5s?” – September 10, 2013 (the day both iPhones were revealed)
Related articles:
Was iPhone 5c the cause of Apple’s woes? – January 28, 2014
MacDailyNews presents live notes from Apple’s Q114 Conference Call – January 27, 2014
Apple beats Street with record quarterly revenue, record iPhone and iPad unit sales – January 27, 2014
Why would anyone buy an iPhone 5c instead of an iPhone 5s? – September 10, 2013