Maybe iPhone 5c is Meant to "Flop"

[bonha]

At first I also couldn't figure out why 5c was not cheaper, and why Apple decided to keep the 4s for another year. But here is what Apple probably had in mind when deciding to come up with a 5c model in the first place:

1. iPhone 5c is meant to push people to buy iPhone 5s: because iPhone 5s is too similar with iPhone 5, more people who are indifferent between 2013 and 2012 technology would chose iPhone 5 for its price. Making the second-tier iPhone of 2013 into a plastic-packed iPhone 5c would encourage more people to go with 5s.

2. iPhone 5c is meant to push up the margin: for those who really don't care about what CPU or other fancy technology packed inside their phones, or those who really want to spend $100 less, buying iPhone 5c means big revenue per sell for Apple.

3. Keeping iPhone 5 would probably also affect the iPhone 5s production, since they use the same casing (random thought).

So the logic probably becomes:
- For consumers who are buying an iPhone this year, encourage as many of them to buy iPhone 5s. If Apple were keeping the 5 this year, some of them would just go for 5.
- For those consumers who really want to spend $100 less, earn more revenue from them. If Apple were keeping the 5 this year, they will have less margin compared to 5c.

 

[ISKOTB]

I came from the 4s to the 5s but if I had the 5 I wouldn't get the 5s/5c since the difference isn't huge really IMO

At first I also couldn't figure out why 5c was not cheaper, and why Apple decided to keep the 4s for another year. But here is what Apple probably had in mind when deciding to come up with a 5c model in the first place:

1. iPhone 5c is meant to push people to buy iPhone 5s: because iPhone 5s is too similar with iPhone 5, more people who are indifferent between 2013 and 2012 technology would chose iPhone 5 for its price. Making the second-tier iPhone of 2013 into a plastic-packed iPhone 5c would encourage more people to go with 5s.

2. iPhone 5c is meant to push up the margin: for those who really don't care about what CPU or other fancy technology packed inside their phones, or those who really want to spend $100 less, buying iPhone 5c means big revenue per sell for Apple.

3. Keeping iPhone 5 would probably also affect the iPhone 5s production, since they use the same casing (random thought).

So the logic probably becomes:
- For consumers who are buying an iPhone this year, encourage as many of them to buy iPhone 5s. If they were keeping the 5 this year, some of them would just go for 5.
- For those consumers who really want to spend $100 less, earn more revenue from them. If they were keeping the 5 this year, they will have less margin compared to 5c.

 

[bonha]

I came from the 4s to the 5s but if I had the 5 I wouldn't get the 5s/5c since the difference isn't huge really IMO

Then consumers like that probably wouldn't buy an iPhone this year in the first place.

 

[cyks]

Oh look, this again.

Last year, when the 5 was released, people could purchase the 5 for $200, the 4S for $100, and the 4 for free...and nobody raised an eyebrow. This year, they've done the exact same thing, but replaced the 5 with a 5C and people are up in arms with conspiracy theories. Why?!?

It's virtually the same phone as the 5, has a few improvements, and comes in multiple colors.

If it weren't for the 5C, the 5 would be sold in its place and nobody would care.

As it is, for everyone saying it's bombing, the 5C is selling more phones than the 4S did in the same $100 place last year. That's not bombing.

 

[Merkie]

Oh look, this again.

Last year, when the 5 was released, people could purchase the 5 for $200, the 4S for $100, and the 4 for free...and nobody raised an eyebrow. This year, they've done the exact same thing, but replaced the 5 with a 5C and people are up in arms with conspiracy theories. Why?!?

It's virtually the same phone as the 5, has a few improvements, and comes in multiple colors.

If it weren't for the 5C, the 5 would be sold in its place and nobody would care.

As it is, for everyone saying it's bombing, the 5C is selling more phones than the 4S did in the same $100 place last year. That's not bombing.

Indeed. And production costs will easily scale because the materials used are far less expensive than the materials in the 4(S) or 5, so Apple will be able to maintain its margins even two years down the road on the 5C.

For those questioning the success of the 5C: fast forward two years down the road. The 5C will be €399 (the 5C is not for the US so I'm ignoring the US market) and will be the cheapest iPhone. At the same time, it will be very capable. Currently, Apple wants you to buy the 5S instead of the 4S because the margins on the 5S are higher. In two years time, Apple won't care. Every iPhone will be good money for them. That's what they're aiming to achieve with the 5C.

 

[Lucille Carter]

Just another thread second guessing Apple marketing. LOL!

Like the need help from you!

 

[ISKOTB]

good point

Indeed. And production costs will easily scale because the materials used are far less expensive than the materials in the 4(S) or 5, so Apple will be able to maintain its margins even two years down the road on the 5C.

For those questioning the success of the 5C: fast forward two years down the road. The 5C will be €399 (the 5C is not for the US so I'm ignoring the US market) and will be the cheapest iPhone. At the same time, it will be very capable. Currently, Apple wants you to buy the 5S instead of the 4S because the margins on the 5S are higher. In two years time, Apple won't care. Every iPhone will be good money for them. That's what they're aiming to achieve with the 5C.

 

[maflynn]

1. iPhone 5c is meant to push people to buy iPhone 5s: because iPhone 5s is too similar with iPhone 5, more people who are indifferent between 2013 and 2012 technology would chose iPhone 5 for its price. Making the second-tier iPhone of 2013 into a plastic-packed iPhone 5c would encourage more people to go with 5s.

That makes no sense, the cost to gear up manufacturing is sizable, and to incur that level of cost just as a mechanism to have people buy the 5s makes no business sense. Its like having GM make a car that was not intended to sell but push others to a Malibu or something

2. iPhone 5c is meant to push up the margin: for those who really don't care about what CPU or other fancy technology packed inside their phones, or those who really want to spend $100 less, buying iPhone 5c means big revenue per sell for Apple.

This is true, since apple really didn't lower the costs and they're using last years technology.

3. Keeping iPhone 5 would probably also affect the iPhone 5s production, since they use the same casing (random thought).

No different then when apple kept the iPhone 4 after releasing the 4s. In effect the 5c is the 5 that they kept around. imo, it makes no sense to have a 5c and a 5 being sold when they're effectively the same phone

Apple's mistake was that they priced the phone higher then it out to be, the market spoke with their wallets and the 5c is not selling

 

[ISKOTB]

Yes, not everyone needs or can always afford the latest

Then consumers like that probably wouldn't buy an iPhone this year in the first place.

 

[phpmaven]

So your theory is that Apple spent billions of dollars developing a phone to get people to by another phone?

 

[Jimmy James]

2. iPhone 5c is meant to push up the margin: for those who really don't care about what CPU or other fancy technology packed inside their phones, or those who really want to spend $100 less, buying iPhone 5c means big revenue per sell for Apple.

The 5c is $100 cheaper, but Apple is not saving that amount in production costs. If anything, the margin is tighter on the 5c.

 

[proline]

That makes no sense, the cost to gear up manufacturing is sizable, and to incur that level of cost just as a mechanism to have people buy the 5s makes no business sense. Its like having GM make a car that was not intended to sell but push others to a Malibu or something

Both you and the person you are responding to are missing the point. The 5C is intended to make sure that Apple makes about the same amount of profit on the $100 cheaper phone as they do on the flagship. With that achieved, Apple no longer has to care whether it sells well or not! If the 5C becomes Apple's #1 seller, Apple makes lots of money. If it drives people up to the 5S, Apple still makes their money. The plan was always to declare victory either way. What it is not intended to do is to grow Apple's marketshare like the dream "cheap iPhone". Chances are Apple will sell the same total number of phones as they would have had they kept the 5, they will just make more money.

Your point about the cost of manufacturing is also flawed. The 5C likely sells in the range of 10-15 million units a quarter, making it one of the most mass produced phones in the world. Call it a failure if you wish- it certainly doesn't come anywhere near the 40 million or so 5S phones that will be sold- but it is still a HUGE seller that more than pays for itself.

Apple's mistake was that they priced the phone higher then it out to be, the market spoke with their wallets and the 5c is not selling

Again, this is no mistake. The 5C was meant to ensure that Apple still makes their profit as smartphones become "good enough" and their customers start choosing cheaper models. And again, your point that the "5c is not selling" is pure garbage. You have zero evidence to support that and HTC / BB / Motorolla / Nokia would kill to have a "failure" like the 5C in their lineups. Only Samsung and Apple have models that outsell it.

 

[Twimfy]

Who cares?

It's out there for sale. Some people like it (like me) and buy it, some people don't like it and won't buy it. Case closed until they either pull it from the shelves or announce that is has been a massive success.

Truth is nobody knows what the score is until Apple say so, there have been no official sales figures announced and all of these "flop" rumours come from either people saying they haven't seen them in the wild or that they've been ignored by customers in Apple stores. Neither which prove anything because there are others who say they have seen more 5Cs in the wild than 5S's and people are hovering around them in stores.

As for the production being cut story, again we don't know any of the reasons behind that and we can only make guesses.

 

[sviato]

Actually, the 5c isn't a flop. Read an article this morning about how 50% of 5c buyers are new to iOS and most come from Samsung and LG devices (compared to 20% of 5s). Although the 5s did, reportedly, outsell the 5c, getting more people on iOS seems like a positive outcome for Apple.

 

[joeblow7777]

Actually, the 5c isn't a flop. Read an article this morning about how 50% of 5c buyers are new to iOS and most come from Samsung and LG devices (compared to 20% of 5s). Although the 5s did, reportedly, outsell the 5c, getting more people on iOS seems like a positive outcome for Apple.

Yes, I read this same article. The 5c was never meant to outsell the flagship 5s, but it's doing exactly what it was meant to do; attract new users looking to get their first iPhone. As the article says, most of the people getting the 5s are upgrading from another iPhone, whereas at least half of 5c buyers are coming from the competition. How is that a failure? It's like the gateway drug of iPhones.

 

[LithePanther]

Came here to comment on the cnet article. Beaten to the punch. Disappointed.

 

[AudiA3]

This makes perfect sense

 

[chabig]

I think the 5c is meant to "sell" and it is!

 

[Col Ronson]

who said the 5C is flopping? I've seen reports seeing the 5C popular among low-income people.

 

[applegeek25]

Actually, the 5c isn't a flop. Read an article this morning about how 50% of 5c buyers are new to iOS and most come from Samsung and LG devices (compared to 20% of 5s). Although the 5s did, reportedly, outsell the 5c, getting more people on iOS seems like a positive outcome for Apple.

Agreed. It seems like these 5C complaints are a product of all the pre-release speculation and rumours that were widely publicized. Journalists latched onto this concept of a cheap iPhone for developing countries/entry-level users and didn't let go. A lot of people assumed that Apple would release an iPhone that could compete with Google's Nexus, but failed to listen to several statements that Tim Cook has made in the past. Apple has never/will never lead on price.