Any reasons as to y the iPhone 5C isn't cheap

Apple blogger · Sep 11, 2013

They haven't said what the C is .. It could be cheap, china, colour, cost, etc. but it's an iPhone 5 in plastic with just a $100 reduction.
All my friends were very exited for this phone but I had told them that apple would never reduce the prices of the new phone to capture markets. I was thinking it would cost around $349 starting price as they did with the iPad mini costing $329 but it seems they've gone too far and priced it $549.
In what world would we buy a plastic iPhone that costs just $100 less than aluminium. There is a $99 cost for contract but that's in USA and not in other countries.
They have a very high profit margin on a phone which is very cheap. The moment I saw the price I remembered john scully and the way he priced the products. The 5C should not be for profits but to capture markets, once they've done that, they can get profits automatically.

The only reason for such a high cost I can think of is because the price of dollar has gone up whole the value of yuan and rupee and other currencies have gone down. So if it cost less in china(the manufacturers) then they get it cheap but if the Chinese manufactures increase their prices then it's obvious apple would do that.. So if they want to sell it in other countries they need to see the exchange rate and the future rates. But considering all this, $549 is still way to high for a company who has all alluminim products and only 1 plastic flagship product.
If anyone has any other reason, it would be nice to learn it.

jav6454 · Sep 11, 2013

iPhones are always meant to be sold on contract (best revenue model for Apple). It is not that Apple receives lots of $$ per contract, it is just its far easier to sell $99 phone than a $199 phone.

The 5C was meant to entice Android users. Nothing more.

Zellio · Sep 11, 2013

$$$$$$$$$$$$$$$$$$$$$$$$$$$

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jav6454 said:
iPhones are always meant to be sold on contract (best revenue model for Apple). It is not that Apple receives lots of $$ per contract, it is just its far easier to sell $99 phone than a $199 phone.

The 5C was meant to entice Android users. Nothing more.

People buy android for lots of reasons. There's cheap phones, and premium, and android is both easy to use and modifiable. This was for profit only.

Michael CM1 · Sep 11, 2013

It's the phone that was $649 a week ago. It's now $549 with an array of color options and US models pretty much work on the major carriers.

Apple has never, ever done cheap. I mean Apple has cut prices, but even what people perceive as "cheap" plastic is more impressive than most other plastic phones.

When people said Apple had to create a sub-$500 netbook to compete because EVERYBODY was making netbooks, Apple created the MacBook Air and iPad. Then nobody wanted netbooks any more.

Apple isn't trying to sell the most phones just as Lexus and BMW never try to sell the most cars. "Here's what we make. You want it at this price or not?" Apple has made a killing on that model. So I don't know why all of these supposedly smart market analysts thought a plastic casing was going to mean Apple was going to all of a sudden go cheap.

Mrbobb · Sep 11, 2013

Cook kept his word. Once he was asked if Apple was building a cheap phone and he said NO.

1984 · Sep 11, 2013

I would also point out that the 5c does get the improved LTE chipset, front facing camera and larger battery that the 5s has so it's actually an improvement over the 5 in a few ways.

LizKat · Sep 11, 2013

I think one of the reasons may be that the high price off contract probably serves to reduce the number of phones that get bought for the purpose of immediately flipping them into markets where Apple does not yet sell or does not sell immediately upon a launch.

Apple blogger · Sep 11, 2013

Michael CM1 said:
Apple isn't trying to sell the most phones just as Lexus and BMW never try to sell the most cars. "Here's what we make. You want it at this price or not?" Apple has made a killing on that model. So I don't know why all of these supposedly smart market analysts thought a plastic casing was going to mean Apple was going to all of a sudden go cheap.

it is not because they made an iphone with plastic...Think logically... The've never used plastic on any flagships after 2009, the company has all aluminum products and then suddenly after a few years they launch a phone with a plastic back, this can only mean that they want to bring out a product for the left out market, so i said it should be priced at $349 which is still not "cheap" but is less than their regular pricing like they did with the ipad mini( keeping the aluminum body but giving it a little low... just imagine if they would have given the ipad mini with plastic and then priced it at $500, it would definitely go a waste). Pricing the iphone at $549 and then giving an aluminum at $649 doesnt make any sense.

The Robot Cow · Sep 12, 2013

I'm a believer of you get what you pay for. Apple makes top notch products and they do cost a premium, but i think its worth it.
They still do offer the 4s if you want a cheap new iPhone

VirtualRain · Sep 12, 2013

The only (sorta) cheap iPhones are the ones on Craigslist. And that's the way it should be.

Now, if you're asking why an expensive handset is made out of plastic, I can't answer that. It just doesn't make any sense to me at all. It can't cost much less to manufacture given all the metal inside to make it rigid. And we all know Apple can make colourful metal devices (iPods). I just don't get it.

LizKat · Sep 12, 2013

^^ Think fashion. It doesn't have to make sense. It can be a lot of fun though, and still be functional. Think cargo pants when they first emerged. People said "What on EARTH? They are UGLY and DANGEROUS and TOO EXPENSIVE" and then a zillion people bought them.

atlatnesiti · Sep 12, 2013

jav6454 said:
The 5C was meant to entice Android users. Nothing more.

You can't be serious... Android users will lough it up, iPhone 5 series screens are way to small. Even mini versions of HTC One and Samsung Galaxy 4 have much bigger screens. For that very reason, Chinese will snub it as well. Phablets are the latest craze in Asia with sales/uptake increase of %620 in last 12 months.

throAU · Sep 12, 2013

atlatnesiti said:
You can't be serious... Android users will lough it up, iPhone 5 series screens are way to small. Even mini versions of HTC One and Samsung Galaxy 4 have much bigger screens. For that very reason, Chinese will snub it as well. Phablets are the latest craze in Asia with sales/uptake increase of %620 in last 12 months.

Oh, this must be why HTC specifically shrunk the HTC One (the HTC One Mini) for 1 handed use.

http://www.htc.com/au/smartphones/htc-one-mini/

Having been using a HTC one for the past 2 days now, I am inclined to agree with Steve Jobs that the iphone is about the right size.

Reaching the top of the screen with my thumb is not easy 1 handed and uncomfortable.

Tracing an area over the glass where it is comfortable to use and placing my iphone 4 next to it... guess what size the thumb smear is?

Roughly iphone screen sized....

If you use your phone 2 handed, sure... but bigger screen is not everything.

edit:
1/3rd of an inch measured diagonally is not "much bigger"...

Michael CM1 · Sep 12, 2013

Apple blogger said:
it is not because they made an iphone with plastic...Think logically... The've never used plastic on any flagships after 2009, the company has all aluminum products and then suddenly after a few years they launch a phone with a plastic back, this can only mean that they want to bring out a product for the left out market, so i said it should be priced at $349 which is still not "cheap" but is less than their regular pricing like they did with the ipad mini( keeping the aluminum body but giving it a little low... just imagine if they would have given the ipad mini with plastic and then priced it at $500, it would definitely go a waste). Pricing the iphone at $549 and then giving an aluminum at $649 doesnt make any sense.

Plastic isn't really any "cheaper" than aluminum. There are artificial hearts made of plastic. My guess is there needed to be some new way to differentiate the iPhone 5C from the 5S instead of throwing a slightly modified 5 out there. It does give Apple some press on the $99 phone instead of "oh yeah, it's that phone from last year." Plus as someone else mentioned, and this is quite important, the 5C has the upgraded LTE that works on multiple carriers.

I have zero desire for one because I want 64GB of storage (payment for going with 16GB for two years after knowing what 32GB was like), and I really would like the improved camera, faster CPU and Touch ID.

TC03 · Sep 12, 2013

Two things:

1. Profit margins have been going down. In Q2 2012 it was 47%, in Q3 2013 it was 37%.

Screen-Shot-2013-04-25-at-4-25-9.26.53-AM.png

2. This is probably a direct consequence of the ASP which has been going down as well (e.g. Apple sells more older, cheaper models with lower margins).

So it's simple: cheap iPhones have been becoming increasingly popular. As a result, profit margins and profit as a whole have been decreasing. Consequently, Apple is reducing costs for the older iPhones by making them plastic, which should keep margins and profit 'healthy'.

The iPhone 5C is cheap for Apple, not for us. Feels like a bit of a scam because we used to get last year's model for $99, now it's last years model in plastic for $99.

TC03 · Sep 12, 2013

LizKat said:
I think one of the reasons may be that the high price off contract probably serves to reduce the number of phones that get bought for the purpose of immediately flipping them into markets where Apple does not yet sell or does not sell immediately upon a launch.

No, this doesn't make sense at all. The price is $549 because that's what it costs for Apple + their normal margins (maybe a bit higher this year). Nothing else. They don't have a second agenda.

7709876 · Sep 12, 2013

Michael CM1 said:
It's the phone that was $649 a week ago. It's now $549 with an array of color options and US models pretty much work on the major carriers.

It is a year old phone that was $649 last year. It is in a cheaper plastic case.

$549 is madness in my opinion.

Look at other consumer items on the market. Would you pay the same for last years model of anything once the new model is launched? Think cars, televisions, etc

atlatnesiti · Sep 12, 2013

throAU said:
Oh, this must be why HTC specifically shrunk the HTC One (the HTC One Mini) for 1 handed use.

http://www.htc.com/au/smartphones/htc-one-mini/

Having been using a HTC one for the past 2 days now, I am inclined to agree with Steve Jobs that the iphone is about the right size.

Reaching the top of the screen with my thumb is not easy 1 handed and uncomfortable.

Tracing an area over the glass where it is comfortable to use and placing my iphone 4 next to it... guess what size the thumb smear is?

Roughly iphone screen sized....

If you use your phone 2 handed, sure... but bigger screen is not everything.

edit:
1/3rd of an inch measured diagonally is not "much bigger"...

Agreed, top Android phones like HTC or Samsung give their customers options: the same model with similar features, but with at least two different screen sizes, 5" and 4.3" and recently 6" phablets to boot. Why not Apple..?
Personally I'm sick of arguing about iPhone screen size.
btw; I always use my iPhone 5 two handed, couldn't care less for "finger goes from here to here", does not apply for my use. Courses for horses...

smirking · Sep 12, 2013

jav6454 said:
iPhones are always meant to be sold on contract (best revenue model for Apple). It is not that Apple receives lots of $$ per contract, it is just its far easier to sell $99 phone than a $199 phone.

There was a story on Business Insider that speculated that it's possible that Apple has contractual obligations with carriers to keep the off-contract price at certain levels. That would make sense. People forget that when iPhones are concerned, it's not just Apple alone calling the shots.

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atlatnesiti said:
I always use my iPhone 5 two handed, couldn't care less for "finger goes from here to here", does not apply for my use. Courses for horses...

That's smart of you. I'm a former physiotherapist and I really wonder what people are doing to their hands (and eyes) with these addictive devices that aren't terribly ergonomic to begin with and even less so when people use them one handed.

Michael CM1 · Sep 12, 2013

Sue De Nimes said:
It is a year old phone that was $649 last year. It is in a cheaper plastic case.

$549 is madness in my opinion.

Look at other consumer items on the market. Would you pay the same for last years model of anything once the new model is launched? Think cars, televisions, etc

I haven't checked unlocked prices, but I'm pretty sure the 5 was $649 last week -- literally -- before the new model was announced. Now you can get a slightly upgraded version of the 5 for 85 percent of that price (I'm comparing the 16GB models).

I sure as hell am not getting an iPhone 5C because there is an iPhone 5S that has more bells and whistles. But it will sell like crazy to the crowd who doesn't care about the A7 or other upgrades. As I saw pointed out somewhere, that's still a huge upgrade for the crowd with any of the non-retina iPhones. On contract, you're also talking about half the price compared to the 5S.

I'm willing to bet that's not most of the crowd here. But we are such a minute portion of Apple's market. I NEVER wanted an iPod nano, but Apple sure has sold a bunch of those things.

jav6454 · Sep 12, 2013

atlatnesiti said:
You can't be serious... Android users will lough it up, iPhone 5 series screens are way to small. Even mini versions of HTC One and Samsung Galaxy 4 have much bigger screens. For that very reason, Chinese will snub it as well. Phablets are the latest craze in Asia with sales/uptake increase of %620 in last 12 months.

1. Yes I am. This is not meant to supplant Android, just make Apple have a stand on the entry-mid level market.
2.[citation needed]

smirking said:
There was a story on Business Insider that speculated that it's possible that Apple has contractual obligations with carriers to keep the off-contract price at certain levels. That would make sense. People forget that when iPhones are concerned, it's not just Apple alone calling the shots.

It has always been Apple calling the shots when it came to the iPhone. The carrier just accommodated to the iPhone, not the other way around.

Icaras · Sep 12, 2013

TC03 said:
Two things:

1. Profit margins have been going down. In Q2 2012 it was 47%, in Q3 2013 it was 37%.

Image

2. This is probably a direct consequence of the ASP which has been going down as well (e.g. Apple sells more older, cheaper models with lower margins).

Image

So it's simple: cheap iPhones have been becoming increasingly popular. As a result, profit margins and profit as a whole have been decreasing. Consequently, Apple is reducing costs for the older iPhones by making them plastic, which should keep margins and profit 'healthy'.

The iPhone 5C is cheap for Apple, not for us. Feels like a bit of a scam because we used to get last year's model for $99, now it's last years model in plastic for $99.

Spot on. My wife also came to the same conclusion as we watched the keynote. This is all about keeping margins back up to healthy levels, not about breaking into cheaper, developing markets. The production and material costs for products like the iPhone 5/5s, the iPad mini, and even the new super thin iMac have gone up due to having more complex manufacturing costs and higher quality control.

As for the "bit of a scam" part, the 5c does come with improved battery, a better FaceTime camera, and retains 16GB storage (I don't remember if Apple offers 8GB models only to older iPhones). At least they tried compensating a bit for the cheaper plastic construction.

tymaster50 · Sep 12, 2013

I still think Apple should lower their prices. Eventually, their sales as a whole will start slowing down considerably from the sheep realizing that they're buying the same thing over and over again.

zedzded · Sep 12, 2013

I think when you've even got Apple Fanboys saying it's too expensive, it must be overpriced. It's just too close to the 5S and there is too much of a discrepancy in features between the two models. Essentially they are relying on people who have no idea what they're doing to buy the 5C. It just doesn't make sense, unless you really, desperately want an under-specced plastic coloured phone or your budget can't stretch an extra $100. And if that's the case perhaps you shouldn't be spending AU $800 on a smartphone in the first place. I think the 5S will sell OK, I just can't see the 5C shifting volume at those whack prices. I'm pretty sure they'll drop it 30% after a month or two.

Icaras · Sep 12, 2013

zedzded said:
I think when you've even got Apple Fanboys saying it's too expensive, it must be overpriced. It's just too close to the 5S and there is too much of a discrepancy in features between the two models. Essentially they are relying on people who have no idea what they're doing to buy the 5C. It just doesn't make sense, unless you really, desperately want an under-specced plastic coloured phone or your budget can't stretch an extra $100. And if that's the case perhaps you shouldn't be spending AU $800 on a smartphone in the first place. I think the 5S will sell OK, I just can't see the 5C shifting volume at those whack prices. I'm pretty sure they'll drop it 30% after a month or two.

You do realize that the 5c is essentially the same tech as an iPhone 5, right? If nothing changed in Apple's tradition, the iPhone 5 would still sell on September 20th, but at a $100 cheaper, as its always been.

There's a couple of differences this time around though. One, yes, the build quality is of cheaper plastic construction. But the second difference is that the 5c actually comes with a bigger battery, an improved FaceTime camera, and kept the iPhone 5c at 16GB. Doesn't Apple normally lower older iPhone models to 8GB after a new model is released? But anyway, having considered these differences, how much cheaper were you expecting the 5c to be exactly?

Any reasons as to y the iPhone 5C isn't cheap

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