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iPhone 5s Reportedly Outselling iPhone 5c Two-to-One Since Launch
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Actually they do, they just chose (incorrectly) to over spec and over price it meaning they're completing missing the market they were targeting.
Absolutely correct.
Whereas if they had put 4S internals in it and sold at a much lower price to widen the gap to the 5S, it would've hit the sweet spot for the market they wanted to target.
Its a good thing that the high-end model is selling well.
As for the 5C, everything depends on Apple's business model. If (for whatever reason) it was just more economical for them to make a plastic version than to continue to sell the old 5 at a discount, then they're probably OK. If the 5C was meant to open new markets and outsell the high-end model 2:1 ...and the business projections and profit margins were based on that... then someone's gonna be spending more time with their family.
However, I just had a look on a carrier website and, in the UK: on a £37/mo contract the 5S is £99 up front c.f. £49 for the 5C. Skimping 50 quid and getting lower specs on a phone that you're going to be tied to for 2 years just doesn't make sense - and if £50 is a big deal to you then you shouldn't even be thinking of a £37/mo smartphone.
Thank you! I think if that phone was FREE on contract it would have done wonders. $100 is too small of a difference between the 5s and 5c, given that 5s provides better processor, 64 bit, fingerprint reader, and needless to say premium finish. $200 would have made more sense.
Would be interesting to see what Apple will do next year. Will they keep the 5c and move it to the free spot and introduce the 5sc (with S internals)?
Apple didn't invent pricing. All companies strive to get higher margins on their premium products, or else they have a big problem. As you have verified (thanks), Apple is no exception.
Manufacturing costs are only a part of the price. You think Apple magically switched to a new processor? They had to spend at least several years working on the transition. That was not free. The internals in the 5c didn't change and the switch to the plastic back means it can be assembled faster than a 5s. That is not calculated in the cost you quoted.
And you know their marketing strategy now? Just what did your insider at Apple tell you what market were they heading for, exactly?
And then you would have had people complaining that they were looking forward to last year's model at a lower price, only to have it killed off.
I think the iPhone 5 is well designed, compared with the iPhone 4. The iPhone 4 was beautiful, but putting glass on both the back and the front made it very likely to break if you dropped it. The bumpers helped a lot.
I have accidentally dropped my iPhone 5 a number of times onto hard surfaces such as stone or concrete. Each time I picked it up and examined it, and found no dents or scratches, and the front glass remained intact.
I don't think that Apple was trying to pull the wool over anyone's eyes with the 5C. They're selling a version of last year's model for $99 on contract, just as they have done in the past. This time they change the shell to one that could be manufactured less expensively, so they get higher margins than they would have if they simply sold the iPhone 5 for $99. In other words, Apple makes more profit on each 5C than they would have if they had continued to sell the 5.
I agree that the older glossy white macbooks usually looked quite clean. However, I was at the apple store the other day, and the display model of the white 5C was quite dirty, especially around the side edges where people obviously grab it. Also, the 5C white plastic seems quite different from the Macbook's white plastic, at least the texture feels different.
Unfortunately this is far too basic an analysis which doesn't take into account so many factors.
Apple may be better off at these costs / prices when someone buys a 5S, but they don't want a load of 5C's that they're struggling to ship in comparison.
Apple went after the low(er) end marketplace.
They designed a new reduced cost chassis for the 5C.
They've aggressively marketed it and talked about plastic as if they had just invented it.
They set high production runs, clearly expecting it to sell better than it has.
All of this would've cost them a pretty packet of cash.
But they messed up. It's just too expensive in comparison to a product many perceive to be superior value (the 5S).
It's a difficult one to recover from now if they are truly serious about large volume sales in the low end. How do you address next year's model if the one you're already shipping is over specced for the market?
How do you improve it, but reduce the costs to return a level of profit deemed acceptable?
They've given themselves a dilemma by not launching the product the industry and customers expected them to.
The direct competition for the 5c is the HTC One Mini and the Samsung S4 Mini. The 5c is £469 and both the HTC One Mini and S4 Mini are £379 - that is a big difference in price. And when you compare the 5c pricing to the Samsung S4 and HTC One, it is not that much cheaper - 5c @ £469, HTC One @ £489, S4 @ £499.
The biggest problem as I see it (certainly in the UK), is where Apple are pitching the product, namely price wise it falls between the mid-range products from its competitors and their flagship products and the question is whether that market that exists or not. People that don't want the flagship product are going to look at the HTC One Mini and S4 Mini because of the big difference in price and people that want a top-end product will overlook it too.
So the question is, who are Apple expecting to buy the 5c? My only guess is that with the colours and the mix & match covers that Apple are going after the 21 and under market (i.e. school/college/uni) in which it would be considered by its target market as the flagship product with the 5s viewed as a bit too sensible and grown-up in comparison.
At the moment I am likely to get an HTC One Mini for my next phone as the 5c just isn't worth the extra £90.
The biggest problem as I see it (certainly in the UK), is where Apple are pitching the product, namely price wise it falls between the mid-range products from its competitors and their flagship products and the question is whether that market that exists or not. People that don't want the flagship product are going to look at the HTC One Mini and S4 Mini because of the big difference in price and people that want a top-end product will overlook it too.
So the question is, who are Apple expecting to buy the 5c? My only guess is that with the colours and the mix & match covers that Apple are going after the 21 and under market (i.e. school/college/uni) in which it would be considered by its target market as the flagship product with the 5s viewed as a bit too sensible and grown-up in comparison.
At the moment I am likely to get an HTC One Mini for my next phone as the 5c just isn't worth the extra £90.
The 5C was priced in order that it gave people and carriers a choice, whilst not cannibalising 5S sales. If it had been a $100 cheaper, then you would have seen a far different picture.
5s over 5c by 2:1 only? That means 5c is doing great.
If Apple had sold at least 15 million 5s and 5c by now, 10 million 5s and 5 million 5c, it's fantastic sale numbers.
Not counting the 4s and all the 4 & 5 remaining stocks sold out, it was a stunning success by any standard.
Without the 5c, Apple would have not sold 5 million iPhone 5 (vs. 5s) for less profit. They probably sold less than that at this time when 5 was released and 4s was sold for heavy discounts.
5c sales would have been poor if they are outsold by 10:1.
If Apple had sold at least 15 million 5s and 5c by now, 10 million 5s and 5 million 5c, it's fantastic sale numbers.
Not counting the 4s and all the 4 & 5 remaining stocks sold out, it was a stunning success by any standard.
Without the 5c, Apple would have not sold 5 million iPhone 5 (vs. 5s) for less profit. They probably sold less than that at this time when 5 was released and 4s was sold for heavy discounts.
5c sales would have been poor if they are outsold by 10:1.
If senior Apple execs genuinely believed that, they should never have gone after this lower end of the market.
What they've produced is a half way house product, neither one thing nor the other.
This makes sense to me.
The ratio of sales are basically the same as last year, which is reflective of fairly constant consumer segments in each price range.
However, the "year old" model is making MORE profit per sale for Apple than it would've without the switch to plastic.
I think the breakdowns came out and the cost of the two wasn't that different. It was something like $175 to $210 or something like that. So the $100 price difference more than makes up for the added cost of the 5s. Also, presumably, 5s is sold in the high profit high storage size much more than the 5c. And those $100 bumps for added storage are nearly pure profit for Apple
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Killed who? Margins would drop drastically for the 5c if price was reduced by $150. Would more 5cs get sold? Sure. But how many of those would be sales at the expense of a 5s sale? For every 5s sale that got canablized to a 5c sale, you would probably need 3 more 5c sales that never would have happened to make up for the lost profits.
It would have also killed the Apple iPhone resale market as who is going to buy a used 4S if a brand new 5c is available for $400. The resale market helps Apple directly through its trade in program and indirectly significantly by making early adopters willing to buy a new phone each year because resale costs are high.
So I agree with your statement about $399 killing. But I don't think you realize what it would have killed.
Has it ever leveled-out before?
Has the mid-range iPhone eventually outsold the flagship?
I've never heard of that...
This isn't surprising, but i predict a price drop before christmas which will result in it being the best selling iphone ever. It's easier to drop the price than to increase! Early adopters provided statistics for demand at the current price point, and now they can adjust.
Not kidding at all. Their overall ad spending would have had to increase proportional to revenue in order to affect margins. I have seen no evidence that has happened.
Much cheaper than $50? No.
And an upgraded camera and battery aren't insignificant.
Absolutely.
Nope. It was simply that it was cheaper and met my needs.
...it's really, really not. The price of the iPhone 5 would be virtually identical right now and you can get the 5C for less than $50 at most stores.
I'm not surprised AT ALL.
it will eventually reach 3-1 even 5-1.
5s is vastly superior to 5c in terms of design and feel of quality.while 5c cost only a little less.
I personally wouldn't buy a 5c at all even if it was half this price and even if it was the only available iphone.frankly I would consider non apple phones if 5c was the only iPhone.that's how much I hate that design.
it will eventually reach 3-1 even 5-1.
5s is vastly superior to 5c in terms of design and feel of quality.while 5c cost only a little less.
I personally wouldn't buy a 5c at all even if it was half this price and even if it was the only available iphone.frankly I would consider non apple phones if 5c was the only iPhone.that's how much I hate that design.