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Old Jan 27, 2014, 05:42 PM   #1
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iPhone 5s Demand Higher Than Expected, Took Time to 'Build the Mix' Customers Wanted




Today's earnings call revealed that Apple saw lower than expected iPhone 5c sales in the United States, primarily because iPhone 5s sales exceeded Apple's projections.

While Apple did not break down sales between individual iPhone models, the company did indicate that the iPhone 5c ended up representing a smaller mix of iPhone sales than anticipated.

According to Apple CEO Tim Cook, the company's iPhone sales growth in North America was not as high as that seen in other countries partially because Apple underestimated demand for the iPhone 5s, with the iPhone mix being "different than we thought." He also mentioned changes to domestic carrier upgrade plans as a partial reason for weaker-than-expected iPhone sales in the U.S.

The company expected a more balanced demand between the flagship iPhone 5s and the mid-tier plastic iPhone 5c, but actually saw a stronger preference than projected for the 5s, possibly due to a high interest in Touch ID.
Quote:
It took us some time in order to build the mix that customers were demanding. As a result, we lost some units for part of the quarter in North America.
Cook said that it took Apple the better part of the quarter to get the iPhone into supply/demand balance as a result of the unexpected demand for the iPhone 5s, which was in short supply for several months following its release.

While Apple has not revealed how many iPhone 5c devices it has sold, multiple reports suggested that the phone was seeing poor sales compared to the iPhone 5s, with the 5s outselling the 5c by a two-to-one margin. Shortly after the phones were introduced, Apple cut iPhone 5c production while ramping up iPhone 5s production to meet customer demand.

Apple today reported record sales of 51 million iPhones in the quarter, up from 47.8 million in the same time period last year.

Article Link: iPhone 5s Demand Higher Than Expected, Took Time to 'Build the Mix' Customers Wanted
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Old Jan 27, 2014, 05:44 PM   #2
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Big surprise. People want the best—especially Apple customers. If you're primarily concerned with price, you get an Android free on contract.
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Old Jan 27, 2014, 05:45 PM   #3
Corrode
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For $100 over the 5C, the 5S offered A LOT of benefit.
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Old Jan 27, 2014, 05:46 PM   #4
TC03
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I'm surprised this caught Apple off-guard. The iPhone 5c was just a plastic 5 and priced accordingly. Nothing new about the proposition, yet still the forecast was way off apparently.

Serious error in judgement.
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Old Jan 27, 2014, 05:46 PM   #5
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Hoping to see more variety in screen sizes... Imagine if they just sold the MacBook is one resolution. One size doesn't always fit all.

Rumors are pointing to more screen diversity in 2014, which will be a good thing.
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Old Jan 27, 2014, 05:46 PM   #6
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The old thing didn't sell as well as the new thing.

COLOR me shocked
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Old Jan 27, 2014, 05:47 PM   #7
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Whilst I agree with the above, I still reckon that the 5C’s 'low' sales figures will still outstrip some other manufacturers’s primary handset sales many times over, so I doubt that Apple will be too stressed by it all.
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Old Jan 27, 2014, 05:47 PM   #8
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Quote:
Originally Posted by Corrode View Post
For $100 over the 5C, the 5S offered A LOT of benefit.
Just goes to show the 5c was way overpriced... I'll easily pony up 250 off contract for one...
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Old Jan 27, 2014, 05:47 PM   #9
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Avoided the 5C because of touch id on the 5S? Get real. People avoided the 5c because it looks like a cheaper plastic version of the iPhone 5 in amazingly bad colors. Hard to find folks who like the colors. I've asked random sampling from teenage girls to boys, to various age adults and its certainly not love at first sight.

If they had kept the 5 at the lower price, maybe. Or the 5C at a lower price.

I guess people aren't that gullible after all.
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Old Jan 27, 2014, 05:49 PM   #10
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Quote:
Originally Posted by CodexMonkey View Post
Whilst I agree with the above, I still reckon that the 5C’s 'low' sales figures will still outstrip some other manufacturers’s primary handset sales many times over, so I doubt that Apple will be too stressed by it all.
Very true, 5c is a long term bet. Next year it'll be $399 unlocked, that'll be interesting.
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Old Jan 27, 2014, 05:50 PM   #11
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I ordered a 64 gb white/gold 5S the first hour of the release and it took 3 weeks before I received it.
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Old Jan 27, 2014, 05:53 PM   #12
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Quote:
Originally Posted by TC03 View Post
I'm surprised this caught Apple off-guard. The iPhone 5c was just a plastic 5 and priced accordingly. Nothing new about the proposition, yet still the forecast was way off apparently.

Serious error in judgement.
I'd say it was a worthy experiment that didn't work out. Analysts had been saying Apple needed a "cheaper" "new" iPhone. The $300 phone they wanted would have been suicidal (EPS would have badly missed). $450 might have let them "hit targets" but at no net profit relative to what they did this quarter. So it was worth a shot to see if they could drive higher sales by retooling "last year's phone" a bit rather than just keeping the old phone around like they have done in the past.

----------

Quote:
Originally Posted by dlastmango View Post
Just goes to show the 5c was way overpriced... I'll easily pony up 250 off contract for one...
But that won't make Apple any money.

----------

Quote:
Originally Posted by dmelgar View Post
Avoided the 5C because of touch id on the 5S? Get real. People avoided the 5c because it looks like a cheaper plastic version of the iPhone 5 in amazingly bad colors. Hard to find folks who like the colors. I've asked random sampling from teenage girls to boys, to various age adults and its certainly not love at first sight.

If they had kept the 5 at the lower price, maybe. Or the 5C at a lower price.

I guess people aren't that gullible after all.
Keeping the 5 would have siphoned production capacity from the 5s (since it uses the same case), while they were able to use new suppliers for the 5c. Different colors on the 5c might have helped, though. They went a little overboard with the pastels. Perhaps if Angela Ahrendts were around when designs were being bandied about, she could have told them to nix the colors.
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Old Jan 27, 2014, 05:55 PM   #13
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I don't know why anyone would be shocked that the 5c didn't surpass or even meet expectations. You can't repackage last year's tech & then try to pass it off as a fresh new shiny toy. Apple marketing is genius but even that's impossible for them. The buying public isn't that stupid, at least most aren't.
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Old Jan 27, 2014, 05:57 PM   #14
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How many other things also surprised them? How about a lot more people prefer the gold color than they anticipated? How about bigger screen iPhones? It seems there is no more visionary left with Apple; they build things by committees that are out of touch with changing consumer tastes.
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Old Jan 27, 2014, 05:59 PM   #15
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Next year upgrade it to the 5S's battery and give it the A7 and M7 chip and then make it free on contract. That's the market it should be trying to penetrate while they should make the iPhone 6 a 4.5 inch screen beast to appeal to the high end market.
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Old Jan 27, 2014, 06:04 PM   #16
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The 5C did not sell well because the colors of the devices are AWFUL.

Get the colors right, Tim and more people will buy it. Let me make this easy for you:

Red
Black
White

You know, non-Barbie/girly colors. I can't believe how wrong all the analysis is of the 5c.
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Old Jan 27, 2014, 06:04 PM   #17
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It doesn't take a genius to know this. Tim was delusional.
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Old Jan 27, 2014, 06:05 PM   #18
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"He also mentioned changes to domestic carrier upgrade plans as a partial reason for weaker-than-expected iPhone sales in the U.S."

And more changes to contract plans coming - how many buyers will be "out there" at $650 - $850 upfront if the phone cost is no longer "cushioned" under contract?
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Old Jan 27, 2014, 06:07 PM   #19
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Quote:
stronger preference than projected for the 5s, possibly due to a high interest in Touch ID.
I think that pretty much explains it. I for one had to try out that "James Bond Signature Gun" like tech.
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Old Jan 27, 2014, 06:07 PM   #20
trip1ex
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WE tried to pull one over on consumers but it didn't work. They could tell the 5c was an iPHone 5 with a cheaper case.
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Old Jan 27, 2014, 06:08 PM   #21
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Quote:
Originally Posted by goobot View Post
Next year upgrade it to the 5S's battery and give it the A7 and M7 chip and then make it free on contract. That's the market it should be trying to penetrate while they should make the iPhone 6 a 4.5 inch screen beast to appeal to the high end market.
PLEASE STOP with this FREE PHONE nonsense!

There are no free phones. Apple will never make an iPhone that is less than $500 off-contract, the true price of the phone. The fact that people still think there are free phones just goes to show how easily people are manipulated. People (especially in the US) spend nearly $2000 for a 2-year contract, and then think that getting a "free" phone instead of a "$200" phone is a steal.
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Old Jan 27, 2014, 06:12 PM   #22
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Quote:
Originally Posted by ZipZilla View Post
The 5C did not sell well because the colors of the devices are AWFUL.

Get the colors right, Tim and more people will buy it. Let me make this easy for you:

Red
Black
White

You know, non-Barbie/girly colors. I can't believe how wrong all the analysis is of the 5c.
Considering Apple's manufacturing history, I'm surprised people are so shocked at the colours - look at the iPod nano lineup, or in smartphones, look at the colourful Blackberries and Razrs people used to rock... I honestly think it had more to do with the price difference not being that appealing more so than the colours.
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Old Jan 27, 2014, 06:13 PM   #23
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Originally Posted by osx11 View Post
PLEASE STOP with this FREE PHONE nonsense!

There are no free phones. Apple will never make an iPhone that is less than $500 off-contract, the true price of the phone. The fact that people still think there are free phones just goes to show how easily people are manipulated. People (especially in the US) spend nearly $2000 for a 2-year contract, and then think that getting a "free" phone instead of a "$200" phone is a steal.
I never said free phone, i said FREE ON CONTRACT!, the fact is it is a large part of the market, ignoring it would be stupid. Also apple sells the 4s for 450$ so obviously you're wrong.
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Last edited by goobot; Jan 27, 2014 at 06:28 PM.
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Old Jan 27, 2014, 06:13 PM   #24
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why is it that i seem to keep regularly reading things to the effect of "demand was higher than expected" since Cook took over? i thought he was supposed to be some kind of supply chain expert. yet this keeps happening over and over...
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Old Jan 27, 2014, 06:14 PM   #25
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In other words, a big bunch of people who were going to buy the 5c thought, 'at that price I may as well get the 5s'. The 5c is at least 50 bucks too expensive in relation to the 5s and that is not going to change. Strangely enough, it's the very same tactic that Apple has always used to try and coerce buyers into the higher specced computer, except it seems that they didn't mean to this time. Oh well, live by the sword...
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