iPhone 5s Outsells iPhone 5c by ~3.5x in Launch Weekend According to Analytics Data

[spicynujac]

Most people do a contract model, though, in the US.

So it's okay.

Most iphone buyers perhaps, but most people is stretching it.
The point is, Apple had a huge opportunity to expand its user base with a cheaper phone, and they chose to continue their past model of selling an awesome flagship phone, along with last year's discounted model. The 5c is to the 5s what the 4s was to the 5. In other words, this isn't a new product, which is what everyone was hoping for, hence the disappointment. This is simply apple selling last year's phone at a $100 discount which they have done for years.

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source?

The original post states that Japan has an even higher sales rate of the 5s versus 5c.

 

[run1976]

It makes perfect sense. Most people really don't care about the specs of their phone. If Apple had just added the 5S and kept the 5, most people would just get the 5 because it 'looks the same' and is therefore, in their mind, the same thing but cheaper. But now, if someone wants the 'professional' looking phone and not a colorful 'fun' phone they are essentially forced to pay top dollar for the flagship model. When the 4S came out a lot of people bought the 4, this was a problem.

With the new 5C there is less cannibalization of the markets. They have the 4S for the value conscious. The 5C for those who just want a fun phone and don't want to spend top dollar and the 5S for those who want either the bleeding edge technology or want the more adult looking professional phone. You don't really have crossover anymore like you would if the 5 had been retained.

Actually that is not true at all. The 4 did not sell nearly as well compared to the 4s as the latter did compared to the iPhone 5. Link: http://appleinsider.com/articles/13/07/22/iphone-5-accounts-for-half-of-apples-smartphone-sales-iphone-4s-takes-30

So consumers are obviously more spec-aware than you suggest.

And even if you were right, you are basically saying Apple released the 5C so less people would choose this product over the more expansive 5s. Is the 5s so weak that it needs protection from its own predecessor? What kind of business strategy is that? Negative cannibalization? This only works in a vacuum were buyers choose between your products only without considering alternatives from other vendors.

 

[Michael Goff]

Most iphone buyers perhaps, but most people is stretching it.
The point is, Apple had a huge opportunity to expand its user base with a cheaper phone, and they chose to continue their past model of selling an awesome flagship phone, along with last year's discounted model. The 5c is to the 5s what the 4s was to the 5. In other words, this isn't a new product, which is what everyone was hoping for, hence the disappointment. This is simply apple selling last year's phone at a $100 discount which they have done for years.

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The original post states that Japan has an even higher sales rate of the 5s versus 5c.

I don't know why people expected an inexpensive product. Apple doesn't do that with any of their products.

 

[spicynujac]

The way to judge 5c sales is to compare them to 4S sales once the 5 came out.

That's true, although I would expect 5c sales to be higher than 4s:
1) It is a new phone not previously available (some people are attracted to anything that is "new"-
2) It is being HEAVILY marketed (I don't even own a tv and I have probably seen the 5c commercials a dozen times already). I don't think the old 4s was ever marketed, other than perhaps in-store
3) Apple sales steadily grow, and I think every new iphone breaks the sales records of the last, just as market size grows

So considering all those caveats, you could still compare the two but it would be expected that 5c sales would have significantly higher sales than the 4s had a year ago.

 

[cube]

Ehh approximately 3+ MILLION people in three days.

Wow you guys are hilarious.

You mean 3 million channel fill ?

 

[spicynujac]

The reason the 5C isn't priced lower is because of subsidies. The typical subsidy is $450 over 2 years. If a phone is priced at $450 or lower, the phone is free on contract. Anything less than $450 benefits only the cell carrier. The iphone 4s is free on contract, the 5c can't be priced the same as the 4s, so it's $99. When the 4s goes away, it would be nice if the 5c was free.

AT&T and Verizon subsidies, and early termination fees (ETF), are $350.

 

[spicynujac]

FWIW, yellow 5c models are the only ones I see "unavailable for pickup" at various NYC stores... Yellow appears to be the most popular color (at least relative to demand)

Yellow appears to be the most popular color (at least relative to supply)

 

[bawbac]

This will even out overtime I can almost guarantee. Launch week people always by top of the line but now when the average persons becomes eligible for updates they will probably go to the 5c for the cheaper price. Personally I held a 5c and found it to be the nicest feeling phone I've ever held for feel and looks

I doubt it.
Most people are not migrating to an iPhone.
Most(+90%) iPhone purchases come from current iPhone owners upgrading.

So why would someone with an iPhone want a cheaper iPhone?
They don't.

The price is not enough to make people switch from other smart phones they like to an iPhone.

Apple needs to step up their game an innovate!
Not regurgitate.

Most iphone buyers perhaps, but most people is stretching it.
The point is, Apple had a huge opportunity to expand its user base with a cheaper phone, and they chose to continue their past model of selling an awesome flagship phone, along with last year's discounted model. The 5c is to the 5s what the 4s was to the 5. In other words, this isn't a new product, which is what everyone was hoping for, hence the disappointment. This is simply apple selling last year's phone at a $100 discount which they have done for years.

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Ding, ding, ding!!!

 

[mattster16]

Actually that is not true at all. The 4 did not sell nearly as well compared to the 4s as the latter did compared to the iPhone 5. Link: http://appleinsider.com/articles/13...of-apples-smartphone-sales-iphone-4s-takes-30

So consumers are obviously more spec-aware than you suggest.

And even if you were right, you are basically saying Apple released the 5C so less people would choose this product over the more expansive 5s. Is the 5s so weak that it needs protection from its own predecessor? What kind of business strategy is that? Negative cannibalization? This only works in a vacuum were buyers choose between your products only without considering alternatives from other vendors.

Regardless, it is still a smart move to differentiate the high end and 'value' products on more than just a spec level. Now they are differentiated both in terms of specs and design. There are a lot of people out there that don't want a flashy colorful phone and want something that looks more professional. They really have no choice now but to buy the 5S. I think this is further demonstrated by looking at the colors Apple chose to use (none of them are muted or inconspicuous and they did NOT choose to make a black 5C). The market differentiation is better now. Lower spec, colorful, fun value oriented phone is better marketed towards teens/young people/etc. Higher spec, professional looking top tier phone better marketed towards adults/professionals with higher incomes. There is less bleed over now. I never said anything about proportions of sales - all I said was that there were likely many people who bought the 4 that would have bought the 4S had the 4 been bright and colorful and flashy because they wanted Apple's industrial looking design.

 

[run1976]

You are again arguing that the 5C will help pushing people towards the higher end iPhone 5s. This cannot be the strategy. It is way too costly for the small extra amount of 5s phones they sell. The 5s was always destined to be the top seller as every new generation was. The 5c is only needed, if it opens up new markets by itself. At the current price point this will not be achieved.
And even the idea that teenagers will buy more iPhones now that the 5c is out is flawed. Colorful cases were available and used for years. Even most teenagers do not want to stick with a shiny color for the entirety of two years. Their taste changes by the quarter. Therefore a case serves their taste better than any flashy colored plastic phone. And the price is not attractive to most teenagers either.

 

[Nickerbocker]

Because there are millions upon millions of people out there that don't care about specs and would rather pick the $99 option and save $100 bucks.

And the colors will attract teenage girls and women. We are seeing the majority of sales skewing towards the 5S, but you are also dealing with the early adopter, tech geeks right now.

I agree with your analysis. For me, it is sad that people who are only comparing the contract price see the 5C as being 50% the cost of the 5S, but when taking into consideration the payment-plan that is disguised as overpriced cell service...yeah, it makes me sad. Oh well.

 

[spicynujac]

I don't know why people expected an inexpensive product. Apple doesn't do that with any of their products.

Ipod nano is $140
Mac mini is $600
AppleTV is $99
Ipod Shuffle is <$50
Ipod mini (discontinued) but sold at a huge discount to full ipod pricing and according to Wikipedia " While it was in production, it was one of the most popular electronic products on the market, with consumers often unable to find a retailer with the product in stock"

And let's not forget that when Apple introduced the first modern tablet, the ipad, that the expected retail price was over $1,000. Since blowing away all expectations by selling it for half that price, they also introduced the lower cost ipad mini at $330.

The reason Apple *does* sell inexpensive products, is because there is a much larger customer base outside the luxury market. It's the same reason Toyota makes the Camry in addition to a Lexus. In a world with 7 billion people, only a few million people want to pay $600 for a telephone, no matter how nice a telephone it is.

 

[FrozenDarkness]

Ipod nano is $140
Mac mini is $600
AppleTV is $99
Ipod Shuffle is <$50
Ipod mini (discontinued) but sold at a huge discount to full ipod pricing and according to Wikipedia " While it was in production, it was one of the most popular electronic products on the market, with consumers often unable to find a retailer with the product in stock"

And let's not forget that when Apple introduced the first modern tablet, the ipad, that the expected retail price was over $1,000. Since blowing away all expectations by selling it for half that price, they also introduced the lower cost ipad mini at $330.

The reason Apple *does* sell inexpensive products, is because there is a much larger customer base outside the luxury market. It's the same reason Toyota makes the Camry in addition to a Lexus. In a world with 7 billion people, only a few million people want to pay $600 for a telephone, no matter how nice a telephone it is.

everything you listed is expensive in its class

 

[Michael Goff]

everything you listed is expensive in its class

At least somebody understands what I meant. :|

 

[mattster16]

You are again arguing that the 5C will help pushing people towards the higher end iPhone 5s. This cannot be the strategy. It is way too costly for the small extra amount of 5s phones they sell. The 5s was always destined to be the top seller as every new generation was. The 5c is only needed, if it opens up new markets by itself. At the current price point this will not be achieved.
And even the idea that teenagers will buy more iPhones now that the 5c is out is flawed. Colorful cases were available and used for years. Even most teenagers do not want to stick with a shiny color for the entirety of two years. Their taste changes by the quarter. Therefore a case serves their taste better than any flashy colored plastic phone. And the price is not attractive to most teenagers either.

It WILL push some people towards the higher end iPhone. That isn't the sole purpose of the 5C, but it is one of the reasons the redesign of the 5 is smart on Apple's part. The 5C isn't going to open up new markets. The market for an iPhone $100 cheaper than the top of the line model was already there and already filled (by the 3GS and then the 4 and then the 4S).

Therefore why did Apple come out with a completely 'new' model for their 'value' phone? They did it because they know if they had just dropped the price of the 5 and introduced the 5S there would be many people who would say "the iPhone 5 looks the same as the 5S so I will save money and buy that - most people won't be able to tell I don't have the latest phone." This group of customers are now forced to get the 5S.

There is also a group of customers that don't want flashy colors (a significant number of people) who are now forced to get the 5S if they want a new iPhone.

They also introduced a 'new' exciting phone (the 5C) that reinvigorates the 'value' market. People will no longer be buying "the old model". I agree the 5C will be the big seller in the long term. I never said teenagers will buy more iPhones now. What I was saying is that Apple differentiated their markets. They injected more life into the value market with the introduction of a new phone and they also secured the position of the high end market among certain demographics, insuring these people won't be tempted to jump ship and purchase the 'value' model "because it looks the same".

 

[run1976]

It WILL push some people towards the higher end iPhone. That isn't the sole purpose of the 5C, but it is one of the reasons the redesign of the 5 is smart on Apple's part. The 5C isn't going to open up new markets. The market for an iPhone $100 cheaper than the top of the line model was already there and already filled (by the 3GS and then the 4 and then the 4S).

Therefore why did Apple come out with a completely 'new' model for their 'value' phone? They did it because they know if they had just dropped the price of the 5 and introduced the 5S there would be many people who would say "the iPhone 5 looks the same as the 5S so I will save money and buy that - most people won't be able to tell I don't have the latest phone." This group of customers are now forced to get the 5S.

There is also a group of customers that don't want flashy colors (a significant number of people) who are now forced to get the 5S if they want a new iPhone.

They also introduced a 'new' exciting phone (the 5C) that reinvigorates the 'value' market. People will no longer be buying "the old model". I agree the 5C will be the big seller in the long term. I never said teenagers will buy more iPhones now. What I was saying is that Apple differentiated their markets. They injected more life into the value market with the introduction of a new phone and they also secured the position of the high end market among certain demographics, insuring these people won't be tempted to jump ship and purchase the 'value' model "because it looks the same".

I concede there is some merit to your thoughts. But I also think for what the 5c wants to accomplish - according to you - it brings a lot of extra cost and unknowns to the table. Unlike the iPad Mini the 5c will not be able to reach a lot of new customers. It is still too similar to the 5/5s. So I think Apple stopped half-way here instead of developing a truly new line (maybe plastic shell and 4.5-5inch screen. One reason for that may have been a lack of time and resources considering the amount of work put into iOS7, the 5s and potentially other products like a new iPad form factor later this year. Next year though, I am sure we will see a true second iPhone line. This years 5c is a slightly changed 5. And that will not be enough to move the sales needle substantially compared to previous iPhone generations.

 

[xofruitcake]

That's true, although I would expect 5c sales to be higher than 4s:
1) It is a new phone not previously available (some people are attracted to anything that is "new"-
2) It is being HEAVILY marketed (I don't even own a tv and I have probably seen the 5c commercials a dozen times already). I don't think the old 4s was ever marketed, other than perhaps in-store
3) Apple sales steadily grow, and I think every new iphone breaks the sales records of the last, just as market size grows

So considering all those caveats, you could still compare the two but it would be expected that 5c sales would have significantly higher sales than the 4s had a year ago.

And I would throw in the Apple trade in program that they roll out a couple weeks ago. An Iphone 4 fetch about 140 today in Amazon. With the trade in program, someone with an ATT black 16g Iphone 4 can send the phone to Power on (contract by Apple to handle the recycle work) and they will send back enough money for an 5C and may be an Itune gift card with a new 2 years contract (Apple/power on will give $110 for an ATT 16g Iphone 4). 5c is going to be an interesting device for those who don't care about top of the line technology but their 2 years contract is up. It is ideal for the roll over customers. And the color and bumper are designed for woman who want a fashion statement. Good or bad, most smartphone today can do the basic jobs (surfing web, making call, take some pictures, listen to music) pretty well, design, brand and packaging will make a big difference between a product that no one want vs a very successful product.

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I concede there is some merit to your thoughts. But I also think for what the 5c wants to accomplish - according to you - it brings a lot of extra cost and unknowns to the table. Unlike the iPad Mini the 5c will not be able to reach a lot of new customers. It is still too similar to the 5/5s. So I think Apple stopped half-way here instead of developing a truly new line (maybe plastic shell and 4.5-5inch screen. One reason for that may have been a lack of time and resources considering the amount of work put into iOS7, the 5s and potentially other products like a new iPad form factor later this year. Next year though, I am sure we will see a true second iPhone line. This years 5c is a slightly changed 5. And that will not be enough to move the sales needle substantially compared to previous iPhone generations.

Not necessary. Having a true low cost Iphone product (something in the 300 starting range) is a very risky proposition for Apple. You can go to their last fewe quarter earning reports and see how the ASP (average selling price) for Ipad steadily drop from mid 500 before Ipad mini launch to low 400 last q. The profit margin for the low end device is going to be very low and the worst problem is that it will cannibalize 5s and 5c sales. And Apple profit will drop like a rock. A truly low cost Iphone is a dangerous proposition for Apple management and it may or may not be a good choice.

 

[lilo777]

Let's not rush to judgement

CNET posted the following quote from another analyst:

"We estimate the breakdown of the 9M [9 million] first three days' sales as: ~3M iPhone 5s sell-through (with real demand closer to 6M), ~4M iPhone 5c sell-through, and ~2M iPhone 5c non-Apple retail inventory build (representing 1-2 weeks of inventory)."


If this analysts is correct, then:

1. iPhone 5s is not selling that well
2. iPhone 5c is selling better than we thought.
3. Apple sold just 7m iPhones
4. It is likely that none of the iPhone versions will be the most popular phone one the Planet anymore

 

[Adelphos33]

1) I find it interesting that a lot of people here are saying Apple should have released a "lower priced product." Wouldn't that have made sales worse as the product would have to be downgraded even more relative to iPhone 5S, 5, and maybe 4S? Few people have explained why a truly lower cost iPhone would be appealing... iPhones need horsepower to run the latest applications, to take good photos, they need space to hold photos and music, etc.

2) Would those that have been arguing for a cheaper iPhone have chosen that model over the 5S? Seems doubtful to me.

3) What would the ideal mix between 5S/5C be in developed markets? The margins on these phones look basically identical (the margins may end up lower for the 5C due to all the advertising), so I'm not sure why Apple would care one way or the other.

The only way for Apple to satisfy a lot of the people here would be to market separate phones in separate markets - Apple doesn't do that with any products (iPods, iPads, Macs, etc), so I don't expect it for iPhone. In developed markets, the vast majority of people are buying on contract, so iPhones never really were expensive to begin with (aside from the original iPhone pre-price drop)

I have a 5C and think it is an awesome device... The phone will gain traction over time. That said, it may end up selling a lower percentage versus total iPhones compared to something like the 4S due to this kind of scrutiny, the rumors of a "cheap iPhone," etc, which would be an unfortunate result

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It's not demand, it's that the 5 fabrication process could not be made efficient enough to get the margins Apple wanted - NOT that it couldn't be done.

Apple seems perfectly happy letting the market share erode away, as long as they sell 10% more phones year over year, with the insanely high margins they are accustomed to getting.

The problem is that they could have A LOT more users, buying apps in the app stores, buying new Macs because of their enjoyment of the environment, etc... if they released compelling iPhones down to the $399(GASP!!!!) off contract price.

But I guess Apple doesn't care about capturing more business for the developers, developing apps for iTunes and the App Store.

So 10% growth is seen as better for Apple than having more happy customers and more happy developers supporting the iOS and OS X OS's. Instead of being aggressive and taking on Android, Apple is perfectly happy waving goodbye to the position they once had, for the incremental gain.

Say it with me folks - We're #2!!! We're #2!!!! Go

Getting incremental customers is good, but are smartphone customers waiting for an iPhone cost to drop to $399 really going to be buying laptops at $999 and iPads at $500? Seems unlikely

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Not necessary. Having a true low cost Iphone product (something in the 300 starting range) is a very risky proposition for Apple. You can go to their last fewe quarter earning reports and see how the ASP (average selling price) for Ipad steadily drop from mid 500 before Ipad mini launch to low 400 last q. The profit margin for the low end device is going to be very low and the worst problem is that it will cannibalize 5s and 5c sales. And Apple profit will drop like a rock. A truly low cost Iphone is a dangerous proposition for Apple management and it may or may not be a good choice.

This is the missing piece. In order to maintain margins, a true "low cost" iPhone would frankly be a poor product. Compared to all of these good iPhone 5c reviews we have had, the reviews would say the phone had 2/3 year old technology, didn't run popular apps well, had a downgraded camera / download speed, offered minimal storage, etc. Releasing a bad product may be worse than releasing an objectively good product like the 5C.

 

[A1Yola]

The total cost of the 5c with the cheapest AT&T contract is 95% of the total cost of the 5s with the same contract.

People buying the 5c aren't "budget conscious", they either fail at math and economics or they prefer to get a permanent plastic cover instead of having to buy one for the 5s.

I definitely agree

 

[run1976]

Not necessary. Having a true low cost Iphone product (something in the 300 starting range) is a very risky proposition for Apple. You can go to their last fewe quarter earning reports and see how the ASP (average selling price) for Ipad steadily drop from mid 500 before Ipad mini launch to low 400 last q. The profit margin for the low end device is going to be very low and the worst problem is that it will cannibalize 5s and 5c sales. And Apple profit will drop like a rock. A truly low cost Iphone is a dangerous proposition for Apple management and it may or may not be a good choice.[/QUOTE]

True. Itis certainly risky. But saying theiPad Mini destroyed Apples margins in the iPad business is also hard to proof. It is a lower margin product. But market share could have eroded faster without it. And mid-term that poses a risk for Apple, too. It may betrue that thisexperience keptApplefrom offering a truly low-cost iPhone. If thatwas a gooddecision only time willtell.

 

[BuzzMega]

This Means Something.

Anybody who actually confronted the decision to buy the 5S went through the series of checks and balances that underlie this statistic.

All metal? Check.
Better camera? Check.
Better flash? Check.
Fingerprint sensor? Double check.
Hundred bucks more? Balance.

They probably would have sold more iPhone 4S's at $59 each as the lower-price option.

 

[run1976]

@Adelphos33
About the low-cost iPhone: No, I would not have bought it. But as an iPhone user I want Apple to retain a big market share so the expensive iPhoneI may be buying will retain prime softwaresupport in the future. I know that sounds selfish, but the attractiveness of the platform relies on good 3rd party software. Once the market share is too low, some developers mayjjmp ship. I realize even in a worst case scenario this may be years from now. Still, the past has shown negative market share trends in the mobilephone industry are almost impossible to reverse. So, in my mind Cook should worry a little less about optimizing next quarters margin and a little more about regaining growth momentum.

 

[wbeasley]

Short lines due to no stock?

This doesn't surprise me. Almost everyone in the line I was in was there for a 5s. But I did see quite a few people buying both.

Maybe it's different where you live but there are no gold or silver phones here. And few Space Gray.

My carriers says at least two weeks.

So how can Apple possibly sell 3.5x as many as the more readily available 5c?

The data says ACTIVE phones, not ones sold and sitting in a warehouse.

Something is weird...

 

[xofruitcake]

CNET posted the following quote from another analyst:

"We estimate the breakdown of the 9M [9 million] first three days' sales as: ~3M iPhone 5s sell-through (with real demand closer to 6M), ~4M iPhone 5c sell-through, and ~2M iPhone 5c non-Apple retail inventory build (representing 1-2 weeks of inventory)."


If this analysts is correct, then:

1. iPhone 5s is not selling that well
2. iPhone 5c is selling better than we thought.
3. Apple sold just 7m iPhones
4. It is likely that none of the iPhone versions will be the most popular phone one the Planet anymore

Don't forget that 5s is supply constriant. Only space grey is available in large quantity. Silver and gold are available only in limited quantity. So you can easily argue that 5s real demand is in the 7-8M unit range. But the news is not all good. China was not on Iphone 5 first launch country list. And Docomo was not on the list at all for Iphone 5. Everyone can run their own estimate but it looks to me that 5s+5c is about 10-15% ahead of 5+4s number last year after one adjust for China and Docomo. China Telecom + China Unicom has about 250M 3G user +- but only 10-15% of these users can afford Iphone. Docomo has 63M user and 100% of them can afford Iphone (Japan does not have unlock phone. All smartphone are sell through contract. And right now all 3 major carriers, AU, softbank and Docomo, offer 0 cost 16G 5s and 16 and 32g 5c with 2 years contract). 5c is definitely better position than 4s last year. The bar is for 5c to exceed 4s sales last year. 5s does not have as much buzz as 5 last year so the sales may not be as much. But both will benefit from Docomo and China Mobile (no, CM does not have 700+M 3g user. They have 700+M feature + 3g user. They only have about 173M 3g user. And only the top 10-15% user can afford to user Iphone. Iphone will probably be launched at the same time CM launch their TD-LTE network later this year. ).