Apple Further Trims iPhone 5c Production as Customers Continue to Prefer iPhone 5s

[FlunkedFlank]

So what DID the Iphone 5C accomplish.

1) It kept the profit margin higher by reducing production costs of the "Mid-range" phone by dropping the expensive enclosure.

2) It moved all the "Mid-Range" phone production OFF of the already taxed assembly lines of the Iphone 5S, thus allowing for higher yields of the, even more profitable, Iphone 5S.


Of course, just a theory...

I think you nailed it.

I also think they got the colors wrong. Not the overall choices but the fine tuning. My wife wanted to get the yellow but when she saw it in the store she said it entirely the wrong shade of yellow that most women are looking for. Same with the pink. They went too muted in the colors, but if you're in the market for pink or yellow you are going to want the real thing. Note the sales figures from a few weeks ago that placed yellow at the bottom of the list.

 

[Black Magic]

I see this going the iPad Mini route. First version sold on old hardware with moderate results. iPad Mini Retina now is out with the latest and greatest hardware and a price bump. Will the same happen to the C next year? Apple selling two versions of the iPhone 6. Same internal hardware, one with plastic and one decked all the way out?

That is where I see this going.

 

[Mr. Retrofire]

...
Apple markets itself as being the best of the best, so why would their loyal customer base want anything less? This product was conceptually flawed from the beginning.

...

If people want lesser cost/performance, they'll simply buy the previous generation iPhone (which, I suspect, is still viewed as superior to the 5c.)

+1

Correct. Or a previous generation Samsung phone (S3, Note 2, ...).

 

[JJ452]

It's not that the 5c is a failure it's just a new audience for Apple. People who are upgrading from a current iPhone are most likely going to get another top of the line model because that's what they had before. The 5c market is people who are moving from other non-apple phones such as my mum and dad who both got iPhone 5c's when their contracts (Blackberrys) RAN out - they weren't rushing out to purchase one outright or upgrade early as to them it's just a phone (albeit a significantly nicer one than what they are used to).

As for the price - on their network in the UK it's £10 per month cheaper than an iPhone 5s (£240 over the 2 year contract) and that is a considerable saving.

 

[69650]

I see this going the iPad Mini route. First version sold on old hardware with moderate results. iPad Mini Retina now is out with the latest and greatest hardware and a price bump. Will the same happen to the C next year? Apple selling two versions of the iPhone 6. Same internal hardware, one with plastic and one decked all the way out? That is where I see this going.

I think they will change things for the iPhone 6. Follow what they are doing with the iPad. There will be an all new design 4" iPhone Air and 4.7" iPhone Pro. Both will have the same spec and aluminum case.

They will then discontinue the 4s, 5c and 5s and introduce an iPhone Colour - which will just be a rebadged 5c which will be positioned as their entry level iPhone with a significant price drop.

 

[giantfan1224]

I wish there was an ignore feature.

Yes, tell me about it.

 

[robjulo]

But Apple never promised a low cost phone.

I never said they did. Kevinbal was insisting that the 5c was a low cost phone.

 

[giantfan1224]

Call it what you will. Simple disclosure of terms in ways that the average person can understand is common sense and obvious to me.

Should they say, "Hey, we're subsidizing this phone for you! That means we're willing to pay a large portion of the purchase price to the manufacturer so you'll sign a term contract with us. That means we're going to get our money back and more through the monthly charges" Would that suffice? Because that's what is already intuitive. Or would you rather it be: "$15.79 of your monthly bill goes toward your subsidized phone"? Because that's what carriers will have a problem with because that unknown amount is part of their competitive advantage. We don't know how much AT&T, for example, has negotiated with Apple as to the subsidized amount they pay per phone.

 

[512ke]

Do we know if the 5C is not selling? My guestimate is, the 5C is selling better than the 4S did at this time last year. Way better.

Localytics reported as much recently. The 5C is a strong seller.

Maybe Apple just ramped up production like crazy for the launch, filled the channel, and now wants its suppliers to focus on the 5S.

The ONLY people who are disappointed by the 5C are the people who unreasonably INSISTED that the 5C become a give-away phone to grow market share in emerging markets.

Apple never intended that. Instead, the 5C is a replacement for last year's 4S at this time, respecting Apple's existing pricing structure.

Given that Apple is selling record increasing numbers of high end phones while Samsung's high end phone sales report flat or negative growth, I don't think personally that it's reasonable to interpret this latest news as "5C fail"

I know, I know, everyone so badly WANTS to believe the 5C is a fail. They LONG for it to fail. But I will stake my Macrumors reputation on the 5C's being MORE successful than the phone it replaced, by a wide margin.

 

[darcyf]

"With the iPhone 5C Apple may well have created what will prove to be the most popular smartphone in the world, based almost entirely on year-old technology, distinguished only by its colorful plastic casing — yet still sold at premium prices compared to the rest of the industry. Not bad." - Daring Fireball

Guess not. Still, I'd be curious to know how the 5c sales compare to the 4s sales from last year when it was up against the 5. If it's the same or less, then the effort of remodelling the 5 into the 5c was a waste, but if it's more, then it might have been worth it.

 

[Xgm541]

Not too many of these around, eh?

 

[rGiskard]

No surprise here, the amount saved on a 5C over a two year contract is negligable. In exchange you get plastic iPhone in some nasty arse color, a product that looks like it was intentionally designed to look less cool than the more expensive offering. That's never a good business strategy, and Apple was right to avoid it in the past.

 

[Xeyad]

I believe Apple completely missed a golden opportunity to capture the entry market. I worked in retail (outside the US, where all phones are full price and unlocked), and I can tell you that people have gotten fed up with cheapo Android phones. I've seen so many customers who want to make the switch to iPhone, but they're just too expensive. The 5c was so heavily rumored to be very affordable and compete with the cheaper alternatives from Android and WindowsPhone, but it turned out to only be slightly cheaper than the flagship iPhone 5s. The iPhone 5c could've shown the world that great smartphones can be inexpensive.

The off-contract price is ridiculous. Just to put it into perspective: The brand-new iPad Mini w/Retina Display with 16GB WiFi+LTE is CHEAPER than a 16GB iPhone 5c ($529 vs $549). The iPad Mini w/Retina Display has a much higher resolution display, the 64-bit A7 chip, and made out of more expensive aluminum, yet it's still cheaper than the iPhone 5c with year-old hardware.

If the iPhone 5c had similar iPod Touch hardware, and priced at $399 (still a great margin for Apple), it would've shaken the market. People who finally want to ditch their terribly cheap Android phones would've switched to the 5c, and yet there is still a huge market for the flagship "forward-thinking" 5s.

 

[rcread]

Our 9 year old daughter replaced her old 4S with a blue 5C. She couldn't be happier with it. She is always posting up Instagram photos or Youtube videos. Maybe they should be marketing it more toward 9 year old girls.

 

[Teste]

Look, people. It's very simple.

2012: iPhone 4s (16GB) - $99, iPhone 5 (16GB) - $199
2013: iPhone 5c (16GB) - $99, iPhone 5s (16GB) - $199

The iPhone 5c is just a different way of selling last year's phone. It's an IMPROVEMENT over just selling last year's phone.

Of course it's only a different way of selling last year's phone, that's obvious. What's also obvious is that it's a significantly inferior way of doing so - Apple has replaced the iPhone 5 shell for a cheaper plastic case (and this is a fact - no sane person could possibly argue that the plastic shell isn't cheaper to make than the metallic shell of the 5C) in order to have bigger profit margins than if they just sold the iPhone 5 for a lower price. Meanwhile, customers are expected to pay a premium price for a cheaper, inferior phone.

What articles like this tell us is that Apple may have fooled the most gullible of the fanboys, but not everyone else is falling for the "unapologetically plastic" marketing gimmick.

 

[cjmillsnun]

Do we have any data that suggests the 5C isn't selling as well as the 4S did last year and the 4 before it?

Quite the opposite.

----------

Do we know if the 5C is not selling? My guestimate is, the 5C is selling better than the 4S did at this time last year. Way better.

Localytics reported as much recently. The 5C is a strong seller.

Maybe Apple just ramped up production like crazy for the launch, filled the channel, and now wants its suppliers to focus on the 5S.

The ONLY people who are disappointed by the 5C are the people who unreasonably INSISTED that the 5C become a give-away phone to grow market share in emerging markets.

Apple never intended that. Instead, the 5C is a replacement for last year's 4S at this time, respecting Apple's existing pricing structure.

Given that Apple is selling record increasing numbers of high end phones while Samsung's high end phone sales report flat or negative growth, I don't think personally that it's reasonable to interpret this latest news as "5C fail"

I know, I know, everyone so badly WANTS to believe the 5C is a fail. They LONG for it to fail. But I will stake my Macrumors reputation on the 5C's being MORE successful than the phone it replaced, by a wide margin.

I couldn't agree more.

 

[minimo3]

I think the 5c's problem is twofold: the price, and the hideous colors done with the black face. Here's a mockup I did of something simple to correct the latter:

Image

Nice, really like what you've done. Looks so much better than the washed out colors for the 5c

 

[CEmajr]

Price is the biggest problem

It's not the premium built product that is the 5/5S, it has a cheaper looking plastic build and is ONLY $100 less than the top of the line model. It needed to be $399 off contract for the 16GB to be a big hit.

It's not comparable to the sales of 4 when the 4S came out or the 4S when the 5 came out because of the material and design of it. Those phones still have the premium Apple design. The 5C doesn't have the premium build and believe it or not many people DO perceive it as the "cheap" iPhone and a lot of average non-techy consumers are image conscious when it comes to these devices. Especially Apple products.

As for Apple, I doubt they will drop the price. They will likely just continue selling it as it is and just lower production until it settles to where supply and demand meet.

 

[WaxedJacket]

Get rid of the 4s, make the 5c the free phone, and up the 5s production line :dunno:

why have so many phones?

 

[Born Again]

Glad to know my iPhone 5 is a pig.

Pigster

Ie hipster

 

[Count Blah]

Our 9 year old daughter replaced her old 4S with a blue 5C. She couldn't be happier with it. She is always posting up Instagram photos or Youtube videos. Maybe they should be marketing it more toward 9 year old girls.

They did. Just look at the color choices.

----------

I believe Apple completely missed a golden opportunity to capture the entry market. I worked in retail (outside the US, where all phones are full price and unlocked), and I can tell you that people have gotten fed up with cheapo Android phones. I've seen so many customers who want to make the switch to iPhone, but they're just too expensive. The 5c was so heavily rumored to be very affordable and compete with the cheaper alternatives from Android and WindowsPhone, but it turned out to only be slightly cheaper than the flagship iPhone 5s. The iPhone 5c could've shown the world that great smartphones can be inexpensive.

The off-contract price is ridiculous. Just to put it into perspective: The brand-new iPad Mini w/Retina Display with 16GB WiFi+LTE is CHEAPER than a 16GB iPhone 5c ($529 vs $549). The iPad Mini w/Retina Display has a much higher resolution display, the 64-bit A7 chip, and made out of more expensive aluminum, yet it's still cheaper than the iPhone 5c with year-old hardware.

If the iPhone 5c had similar iPod Touch hardware, and priced at $399 (still a great margin for Apple), it would've shaken the market. People who finally want to ditch their terribly cheap Android phones would've switched to the 5c, and yet there is still a huge market for the flagship "forward-thinking" 5s.

I was screaming that from day1 of the 5c's release.

Apple went with the "obviously poorer choice being only slightly cheaper, so I'm going for the more expensive model" approach. This approach wins the battle(more money immediately), but loses the war(shrinking apple market share).

The 5c release will sadly be marketed as the day Apple gave up the fight for the smart phone market. Snatching a loss out of the jaws of victory.

 

[ThisIsNotMe]

The phone should be free on contract or $450 off contract.

 

[inscrewtable]

This is obviously a major blunder by Cook. The 5c is way over priced Tim took a big gamble on the price and lost. He now has to humbly admit he did not see what is plainly obvious to everybody, i.e, the 5c is waaaay overpriced, and reduce it immediately.

Apple will then have an unbeatable pair of phones. This is going to be a big dent in Tim's ego. Can he do it? Probably not but I don't see he has a choice.

 

[wikiverse]

5c is the worst apple product yet.

You should google the newton, the pippin, and the G4 cube.

----------

This is obviously a major blunder by Cook. The 5c is way over priced Tim took a big gamble on the price and lost. He now has to humbly admit he did not see what is plainly obvious to everybody, i.e, the 5c is waaaay overpriced, and reduce it immediately.

Apple will then have an unbeatable pair of phones. This is going to be a big dent in Tim's ego. Can he do it? Probably not but I don't see he has a choice.

But then how will he make back the billion dollars he spent marketing it?

 

[Poisonivy326]

This is obviously a major blunder by Cook. The 5c is way over priced Tim took a big gamble on the price and lost. He now has to humbly admit he did not see what is plainly obvious to everybody, i.e, the 5c is waaaay overpriced, and reduce it immediately.

Apple will then have an unbeatable pair of phones. This is going to be a big dent in Tim's ego. Can he do it? Probably not but I don't see he has a choice.

People in the US are still too locked into the contract frame of mind -- i.e. they get a phone for two years, have a two year contract, and then at the end of the two years, knowing that they have to sign another $2000 contract, they naturally want the latest and greatest phone, as it's chump change compared to their two year monetary agreement.

The iphone 5c was the perfect opportunity to get people to switch over off contract. Alas, they still marketed the 5C the same way they market the 5S -- expensive off-contract, "affordable" with a 2 year contract.

They don't even need to lower the price of the 5C with a two year contract. They need to lower the price of an off-contract, unlocked 5C.