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Apple Cutting iPhone 5c Production at Two Major Suppliers
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Yet another raw meat for the ravenous trolls story featuring some of their same old ignorant comments about dropping price vs. production (if this is your argument, you demonstrate very well a complete and utter lack of product pricing as it relates to product strategy), or the old, "people simply don't want 'old technology'" chestnut (despite the fact it's sold more units and a higher percentage of all iPhone sales than the 4s sold last year in the same period), to the haughty remarks declaring "plastic is cheap," yada yada yada. Yawn.
The article is at least honest in stating it's not known whether this simply might be a cutting of production following the initial launch production surge.
The article is at least honest in stating it's not known whether this simply might be a cutting of production following the initial launch production surge.
"RinAnnotateg-ding-ding-ding-dingeringeding!
Someone gets it. The price off contract is too high. They need to drop it to around $450 while the 5s would be $650. That would draw tons in.
As Steve said when the iPhone was cut by $200...Lower prices will help the company go for it, as Mr. Jobs put it.
The 5C is a very successful product. It's selling well. It's way ahead of the 4S in sales numbers compared to this time last year.
The 5C is an attractive product. I speak from personal experience here.
The 5C has driven people to the 5S.
It's made the 5S more of a status item. Now the 5S gives the following message: I can afford to pay $100 more. I choose to pay more.
Not just, I bought the new. Now it's, I chose the better one.
This is not an insignificant detail lol.
The 5C is an attractive product. I speak from personal experience here.
The 5C has driven people to the 5S.
It's made the 5S more of a status item. Now the 5S gives the following message: I can afford to pay $100 more. I choose to pay more.
Not just, I bought the new. Now it's, I chose the better one.
This is not an insignificant detail lol.
I didn't say anything about dominance. I'm specifically referring to the argument that the 5C is flawed because it's cheap colored plastic. And FYI, I think having black as a color option would have been a good idea. But I don't think it would have stopped the haters from calling it cheap plastic. Apparently only Steve Jobs is allowed to sell plastic Apple products.
I cut out a couple bits, to address the key ones. The little children jab is you not understanding the myriad of arguments people are presenting. You are in "apple think", and can not break out of it. Your #4 and #5 points are EXACTLY what people are saying is the wrong approach.
Apple's approach, with your 10000% obvious approval, is to sell 5% more phones, year after year - period, end of story. Again, look to #4 and #5. But that isn't good enough anymore. That was a fine approach in 2007-2011, but the environment is not the same anymore. You actually have COMPETITION. And right now, Apple is losing market share to the competition. Apple is following the same gameplan that took them to the bring in the 90s - High margins, incremental sales, bury it's head in the sand concerning competition.
From all accounts, the 5 was difficult to manufacture, that was the driving force behind the 5c. IF your goal is to sell 5% more YOY, you go about what Apple did and scoop out the innards of the 5 and slap them in a cheaper to produce plastic shell, and ship 'em. Much like Apple, you end the story here, and berate anyone who questions Apple's approach. But what people are pushing is the battle apple is winning here, is causing Apple to lose the war.
Staying the upper, upper, tier is causing apple to lose market share. At some point in time, following this approach, you will have developers starting to jump ship because its doesn't pay to program to the 5%. You laugh at the notion, but so did Apple at one point in time.
People wanted and still want an upper-mid price point Phone to compete with Android, one they can more easily afford, and secures iOS's position in the environment. Apple path, with you cheering all along the way, eventually leads to high priced dust collectors, when competitors eventually gain a stranglehold of the marketplace.
Wow, just 5 minutes ago those were my thoughts too. A black 5c and a Product Red would really be a great addition and would attract a much larger male audience of many ages. I'm not crazy about the current colors either. Much of that might be the reason for softer sales.
I didn't want a phone with iOS7 in it.
So I returned my 5c and went back to my 4 with iOS6.
It's amazing how many people simply don't understand production schedules.
Here's how it typically works (I'll get into the atypical scenario later):
1) A production schedule starts order to build the initial stock, and supply product for the initial demand.
2) After initial demand is met, production is altered to meet the sustained demand, and keep sales channels supplied against that demand.
In stage 1, there is no existing supply in sales channels, so production must be high.
In stage 2, the initial rush of demand has been met, and the sales channels have adequate supply to sustain them on a day-to-day or week-to-week basis, so production will be lower.
On occasion, demand for a product remains high, or even builds after the initial release and it takes a *long* time to get out of Stage 1.
On occasion, demand for a product settles, but then rebounds, requiring a return to higher production output.
A company that fails to properly estimate the production levels it needs in stage 1 has two possible issues:
a) They build far too few units, and they take a very long time to get out of stage 1. Extended periods in stage 1 can kill interest in the product, because interested people simply cannot get their hands on it so they go with something else.
b) They build far too many units, and stage 2 becomes a production *stoppage*. In worst-case scenarios, there isn't enough *total* demand to sell the units created in stage 1, and the company ends up sitting on inventory, at a severe loss.
There is nothing even remotely unusual about reducing production quantities a month after the initial release of a product that was in high demand right out of the gate. Not doing so would be an indication that the initial demand still has not been met.
Here's how it typically works (I'll get into the atypical scenario later):
1) A production schedule starts order to build the initial stock, and supply product for the initial demand.
2) After initial demand is met, production is altered to meet the sustained demand, and keep sales channels supplied against that demand.
In stage 1, there is no existing supply in sales channels, so production must be high.
In stage 2, the initial rush of demand has been met, and the sales channels have adequate supply to sustain them on a day-to-day or week-to-week basis, so production will be lower.
On occasion, demand for a product remains high, or even builds after the initial release and it takes a *long* time to get out of Stage 1.
On occasion, demand for a product settles, but then rebounds, requiring a return to higher production output.
A company that fails to properly estimate the production levels it needs in stage 1 has two possible issues:
a) They build far too few units, and they take a very long time to get out of stage 1. Extended periods in stage 1 can kill interest in the product, because interested people simply cannot get their hands on it so they go with something else.
b) They build far too many units, and stage 2 becomes a production *stoppage*. In worst-case scenarios, there isn't enough *total* demand to sell the units created in stage 1, and the company ends up sitting on inventory, at a severe loss.
There is nothing even remotely unusual about reducing production quantities a month after the initial release of a product that was in high demand right out of the gate. Not doing so would be an indication that the initial demand still has not been met.
I suspect there will be color additions and adjustments after the new year...spring maybe.
What "softer sales?"
Apple's happy.
The point of the 5C was twofold. First, increase the margin at the $100 price point so it matched the margin on the premium iPhone. Second, be unapolageticly plastic enough to drive most buyers up to the premium iPhone.
Remember that at the end of the last cycle only 50% of customers were buying the 5, fully half were buying the 4 or 4S and dragging Apple's margins down. A low margin (yet premium feeling) 5 in the $100 slot that the 5C now occupies would have continued that troubling trend.
I think it is likely that in the coming cycles only the flagship phone will get the premium materials and adult colors, everything else will be garish plastic.
The point of the 5C was twofold. First, increase the margin at the $100 price point so it matched the margin on the premium iPhone. Second, be unapolageticly plastic enough to drive most buyers up to the premium iPhone.
Remember that at the end of the last cycle only 50% of customers were buying the 5, fully half were buying the 4 or 4S and dragging Apple's margins down. A low margin (yet premium feeling) 5 in the $100 slot that the 5C now occupies would have continued that troubling trend.
I think it is likely that in the coming cycles only the flagship phone will get the premium materials and adult colors, everything else will be garish plastic.
the logistics of this whole release are messed up. No Rogers stores have the 5S, I called Rogers and got put on a wait list for a 16gb silver model that was 600 people long (I believe this was the wait just for corporate customers not even regular customers). I gave it a couple of days and after barely moving walked into the nearest futureshop and got one on the spot. They had every colour of 5C in stock and a couple of black 5S also
Interesting however this further confirms that the 5c's current color scheme is geared towards the female audience and that's a missed opportunity for Apple cutting out the male audience.
I thought your original argument was that the '100.00 difference between the 5c and the 5s did not justify a purchase of a 5c in any circumstance.' At least that's the way it read. Not sure if you meant that or not.
I think you're right though. Apple cares about maximizing profits and they could care less if the 5c didn't sell at all. In fact given the 4s's cannibalization of the 5 last year, perhaps they wanted to limit that effect this year by releasing a phone that clearly differentiated itself from the flagship model.
http://appleinsider.com/articles/13...of-apples-smartphone-sales-iphone-4s-takes-30
Heck, its also possible that this is a *smaller than planned* production cut, meaning the 5c is selling *better* than anticipated at this stage.
We simply don't have all of the data points needed to draw any conclusions as to the *cause* of this change. The article even goes through the trouble of pointing out this fact, though it's ignored by the doomsayers.
Yes. Always. Except when they don't.
The majority of them do. Name someone you know that has a $30 flip phone instead of a smart phone?
Exactly. Buying a colorful iPhone immediately tells everyone that you did not buy the flagship. They know you have an iPhone still but they also know you spent far less on that iPhone than the guy/gal walking around with the metal/adult colored iPhone. Yes its superficial as all hell but consumers are superficial as hell.
No
People choose ANY better product (car, hotel, phone, condom, steak, holiday, shampoo etc etc) when the much better product is only a little more expensive.
If the quality shampoo is 2 dollars and the cheap brand in 1.75 they will think, oh I may as well may the extra 25 cents.
Apple priced it wrong, end of.
Unless they are stupid and have no clue, they planned this to happen all along, making the price so close that people though of I may as well pay the extra.