A failure? Seriously? I say it's a brilliant way to get rid of the extra iPhone 5 guts they contracted to buy.
Here's my take...
Let's just say Apple wanted to make 15 million phones in 2012. The radio/processor/screen vendors said, as vendors typically do, "We'll give you a better deal if you commit to 20 million. "Ok" said Apple.
They do the bulk purchase dance every year. Along comes fall 2013; time for new phones. In the past, Apple would simply keep selling the previous year's model until it ran out of them.
This year, they got smart. Instead of selling the remainder of last year's model at a deep discount, they said, "Hey, why not recase the 5 in colorful plastic, and sell it at a slightly lower price than the 5?"
Then they called up the iPhone 5 aluminum housing factory and said, "Sorry, we won't be needing those expensive iPhone 5 housings anymore, we're doing them in plastic now."
How much money did they just save by switching to plastic?
So, the 5Cs are the overruns of 2013-14, like the 4S was the overrun of 2012-13...and not only are they being sold at less of a discount, they're costing Apple less to make.
In the end, I'd be willing to bet they've sold more 5Cs this year (and at a higher margin) than they sold 4Ss last year, and that is the ultimate goal...to get rid of product overruns in the least painful way possible.
The side bonus to all this is that Apple also gets to do a big real world focus group. Do people want a plastic colored phone? How better to find out than by snapping on a plastic case to the phones you made last year, instead of tooling up for an entirely new model that may or may not flop?
And now they know...maybe a colored plastic phone isn't their best idea. Or maybe after they crunch the numbers, they'll decide it was in fact a success, and that next year, they'll do it again, but with the guts from the latest phone instead of last year's model.
