Tim Cook: iPhone 5c Wasn't Meant to Be an Entry-Level Phone

[kobalap]

So does this mean that next years 5c will have 5s specs and features?

That's been the pattern in the past, right?

----------

Next year:

5c goes free
5sc (5c shell, 5s innards, Touch ID, etc.) at $99/199
6 at $249/349/449

Not a mistake there - I'm betting they'll raise the price on the "high end" model next year. They set the precedent this year with the retina iPad Mini.

These prices assume some subsidy from some contract.

----------

Makes no sense. How is the 5 (with arguably better materials and the same-ish internals) lower end than the 5c?

Where do you get that? Metal is not better than plastic. Metal is different. That doesn't make it better.

In terms of total parts cost, the 5c cost about $5 more than the 5 does.

 

[sionharris]

Apple needs to stop selling outdated technology. They're selling the iPhone 4s and the iPad 2 which won't even be compatible with iOS 8 next year. Hell, the iPad 2 is barely compatible with iOS 7. It runs like crap.

I have an iPad 2 and it runs faster on iOS 7 than it did on iOS 6.

 

[TTile]

Injection-molded crayola color plastic is definitely cheaper than precision machined anodized aluminum.

Whether or not people like the color plastic is a matter of personal preference; it is not evidence that plastic isn't cheap compared to aluminum.

You seem confident. Too bad the facts don't back you up:

"The colorful iPhone 5C has been revealed to cost between $173 and $183 to build after $7 worth of assembly. In comparison, the 16GB variant of the iPhone 5S costs Apple $199"
http://www.designntrend.com/article...ce-video-review-specs-cost-combined-usage.htm

Remember, the 5c is plastic and the 5s is machined aluminum. And when you account for the hardware improvements in the 5s (in particular the A7 chip and rear camera) the price difference is negligible.

Again, Apple didn't switch to plastic to save money. They did it to differentiate their iPhone lineup.

 

[TTile]

It's pretty obvious Apple will just drop the 4S and add a new iPhone 6; the iPhone 5c and the 5s will be unchanged (both will offer multiple storage sizes)

I disagree on the 5s. I agree that there will be a 6 and the 5c will be moved to the 0 dollar price point however I think the 5s is going to get color. The flagship models are the biggest money makers for Apple (highest margins). The 5c was designed to differentiate between the flagship and the mid-tier to increase the sales of the 5s. If they sold the 5 alongside the 5s, consumers wouldn't have as great of an incentive to buy the 5s over the 5. With the 5c, the incentive is patently obvious: The color immediately says to everyone that you did not buy the flagship iPhone and therefore, for 100.00 more, you can have a phone devoid of such negative associations. Its the same reason why BMW slaps numbers on the back of their cars (3, 5, 7 etc); it tells the world how little or how much you paid for your car.

 

[noodlemanc]

Wasn't the best move keeping the 4S around. Yet another year before the 30 pin connector is killed.

Yeah - it's pretty bad inconsistency to sell some devices with 30 pin connectors and some with lightening connectors. Having said that however I can't say that I'm not pleased with the 4S continuing to be sold. I own one myself, and the fact that Apple is still selling it means it'll be supported by both Apple, developers and third parties for longer

 

[ActionableMango]

You seem confident. Too bad the facts don't back you up:

"The colorful iPhone 5C has been revealed to cost between $173 and $183 to build after $7 worth of assembly. In comparison, the 16GB variant of the iPhone 5S costs Apple $199"
http://www.designntrend.com/article...ce-video-review-specs-cost-combined-usage.htm

Remember, the 5c is plastic and the 5s is machined aluminum. And when you account for the hardware improvements in the 5s (in particular the A7 chip and rear camera) the price difference is negligible.

Again, Apple didn't switch to plastic to save money. They did it to differentiate their iPhone lineup.

I agree with your last statement. You state the whole cost of the phone, and that's pretty good evidence to back it up.

But the price similarity as whole hides the tiny fraction that is the materials cost of the rear piece. Walk into Toys 'R Us and show me how many cheap toys are injection molded plastic vs machined aluminum. I stand by the fact that plastic is cheaper than aluminum and it will lead a lot of consumers to feel that way...just look at the comments about it.

 

[TTile]

I agree with your last statement. You state the whole cost of the phone, and that's pretty good evidence to back it up.

But the price similarity as whole hides the tiny fraction that is the materials cost of the rear piece. Walk into Toys 'R Us and show me how many cheap toys are injection molded plastic vs machined aluminum. I stand by the fact that plastic is cheaper than aluminum and it will lead a lot of consumers to feel that way...just look at the comments about it.

Most people on this site are diehard Apple fans. They're likely young males who favor masculine stylings like anodized metal. I doubt they're a good representation of the average consumer.

That being said, the Toys R Us example just doesn't work. Metal and children just don't go together. Children tend bite/chew, throw, and drop their toys. Metal does not yield to teeth. Metal is heavy. Metal could be 10x cheaper than plastic and you would still find plastic in toys.

Also there are many successful flagship phones that have been made out of plastic (i.e. the S4). If consumers really hated it so much they wouldn't be buying these phones.

Finally you admit that the cost difference is minuscule but you mention that Apple moved to plastic because its a "tiny fraction" less expensive. Given your other argument that consumers don't like plastic, the two arguments together don't make sense. If Apple was giving up sales (due to consumers not liking plastic) then they would certainly lose any additional profit they gained by reducing their production costs by a "tiny fraction" per phone. And in fact, they'd likely lose MUCH more than a tiny fraction.

Again, its a product differentiation move.

 

[HVDynamo]

The 5s was giving me a lot of problems and I wasn't happy with the build quality. Touch ID was getting annoying on me too, because it's inconsistent when your hands are too dry or too moist. I had to turn it off. Another thing is how it feels in your hand, and the 5c feels astoundingly better in my hand. I'm really a fan of the design, I think the colors are a fun addition and I enjoy having my phone be colorful, right now. I don't buy leather, so I wouldn't have bought one of the cases. It also hit me that I had spent $400+ on a phone that I wasn't really enjoying all that much.

It shouldn't be a bad thing that I decided to go with a less expensive phone. Once you take away Touch ID, all I really had left was a better camera, slow motion video, and a "faster" phone (I know the 5s is faster, but right now it doesn't feel any faster).

At least my 5c isn't rebooting on me all the time.

In the end, it's a phone. I need something reliable, and that's what the 5c was to me, and I'm more and more surprised by it everyday.

Ha, I think the build quality of the 5S is 10x better (I have played with the 5C in store), I don't like the bright colors at all (I honestly think they are ugly, but that's just my opinion) and have had no issues with Touch ID. I have had the 5S crash on me, but only twice and I believe 7.0.3 fixes the issue. I haven't had any crashes since I installed 7.0.3 so far at least. I guess if you are happy with your choice then more power to you, but I disagree.

 

[Big Wendell]

I'll take 4s over 5c any-day.
It definitely looks and feels much more high end than the awful 5c.

Really? You'd take a phone that will be near worthless in a year over a newer one because it looks nicer? Is this what the conversation's come to? Next up, "5C is sucky 'cause it's just...stupid. I hate it. Stupid plastic! Don't buy it cause, dur, stupid."

I'm not saying I'd buy one, but at least it fully works with the new OS.

 

[Perfect Score]

Nothing groundbreaking - it's always been their strategy to move the old "version" down when new products are released.

I would say 5c is like the Mini and 5s is like the Air. My guess is for iPhone6, there won't be a 6c since there is no demand for 5c.

 

[musika]

Ha, I think the build quality of the 5S is 10x better (I have played with the 5C in store), I don't like the bright colors at all (I honestly think they are ugly, but that's just my opinion) and have had no issues with Touch ID. I have had the 5S crash on me, but only twice and I believe 7.0.3 fixes the issue. I haven't had any crashes since I installed 7.0.3 so far at least. I guess if you are happy with your choice then more power to you, but I disagree.

I understand that is how most will feel. I don't care, hahaha, I really like the 5c for me.

 

[mdelvecchio]

apple does some great and wonderful things but i feel they are so disconnected in some respect its laughable.

yes, so disconnected and laughable that theyre the biggest and most successful tech company in the history of the planet earth. pathetic! they have no idea what theyre doing!

oy. you kids today.

----------

Now they just look silly. Selling last years phone in a plastic case isn't entry level? Of course it is, they just hoped that everyone was too stupid to notice.

yes, despite being the most scrutinized tech company on earth, and despite every device being dissected in hours and posted online, apple somehow thought nobody would notice...completely trying to pull the wool over your eyes. but you figured it out!! youve exposed them!

jesus. i cant believe the stuff some of you believe.

 

[blackhand1001]

Those are the prices without a contract?

What kind of company tries to lose money on sales in the hopes of propping up a meaningless marketshare statistic?

The simple fact is they aren't losing money on those phones. Apple would like you to believe these phones cost a lot more than they do. The 5c costs apple a totle investment of under 200 dollars to make and sell. If Asus can make the nexus 7 for under 229 then apple can easily make the 5c for under 200. Apple just seema to have convinced the public and carriers that it costs 650. Hence why on countries where device subsidies are not common you see significantly worse sales for iphones. The price difference between phones becomes increasingly noticeable and people tend to research more since 650 dollars seems like a lot more than 200 dollars on contract regardless of how much that contract ends up costing. Without device subsidies the iPhone would not sell anywhere close to as well. This is also the reason why you see carriers rolling out these payment plan upgrades because they are tired of eating into their margins to pad apples profits.

 

[BaldiMac]

The 5c costs apple a totle investment of under 200 dollars to make and sell.

No, the iPhone 5C is estimated to cost under $200 in parts and manufacturing labor. There are many other costs involved including patent licensing that apply to each device sale. Then there are fixed costs such as R&D and software development.

This is also the reason why you see carriers rolling out these payment plan upgrades because they are tired of eating into their margins to pad apples profits.

There's a reason why they pay Apple more for the iPhone. It's certainly not because it lowers their profits.

 

[numlock]

yes, so disconnected and laughable that theyre the biggest and most successful tech company in the history of the planet earth. pathetic! they have no idea what theyre doing!

oy. you kids today.

im gobsmacked by the lack of intelligence in your post. why you quoted mine is going way over my head.

and for the record ive been using apple computers since the late 80s

 

[macs4nw]

The logical move would have been to keep the iPhone 5 as the entry-level model, the 5c as the mid-level model and the 5s as the flagship iPhone…..

Now they just look silly. Selling last years phone in a plastic case isn't entry level? Of course it is, they just hoped that everyone was too stupid to notice.

Tim has stated that they wanted to go to the three-tier model where the 4S is the entry level, the 5C the medium tier, and the 5S the flagship phone. As far as attracting a broader customer base is concerned, that makes perfect sense and also explains why the 5 is gone --not enough differentiation from the 5C.

Sometimes it's hard to see it at first, but there definitely is method to their 'madness'.

…..Apple doesn't seem to want to work on their ability to attract a broader international audience by introducing a low-cost unlocked iPhone (less than $300). With contract plans in the US going away and pay as you go being more popular around the world, it would make sense to introduce a new low end iPhone or even just a cheaper, unlocked 4s for world use. Obviously their financial reporting suggests that their is no incentive for them to do this but for them to remain competitive around the world, they need to compete with the low cost smartphone market.

They seem to be doing just fine, without going that low. Millions are willing to pay more for the Apple user experience, ie well thought-out and nicely designed hardware, seamlessly integrated with functional software across multiple platforms.

They won't bring out a lower priced iPhone for price consideration alone, without preserving a quality user experience.

 

[koban4max]

Nope u are! Thinking u can run apple better

sure i can.

 

[Tech198]

Maybe in the U.S, but here in Australia, its about $200 more expensive for the 16 Gig

 

[blabliblu]

IT IS an Entry Level phone.

Problem is that the price is way above its value, but this time people can blatantly see it

 

[Tech198]

You can say its entry level at $99 but on a contract.

 

[lk400]

I don't think scamming means what you think it means.

I think somehow the tongue in cheek humor of my post got lost through the internets.

 

[spicynujac]

That's a totally unfair comparison. Ultramobile, GoSmart, or Spotmobile ≠ AT&T, Verizon, T-Mobile, or Sprint.

Actually, the cost benefit of no contract is that in California and some other U.S. states, you are taxed twice for part of the phone cost if you get it on a contract. That's like a $70 difference, but I think it ends up more than balancing out.

They are not equivalent services. If they were then ATT/Verizon/etc would have no customers at those prices. I'm just clarifying that the statement that a contract iphone is CHEAPER is absolutely FALSE. An iphone on a contract might provide better range, better warranty, better customer service (although JD Power surveys prove the opposite) but it is definitely not cheaper.

----------

The 4s accounts for 22% of iPhone sales. 30% upgrade within 3 - 6 months.

30% of them will buy ANOTHER phone in 3-6 months after spending $400 on the iphone 4s? I don't understand this stat. Source?

 

[kenknotts]

So what's the deal next year? Will Apple sell the current 5c as the entry phone and then have a 5cs as the mid model with the the iPhone 6 as the high end model.

The 5c will be the entry level, the 6c will be the mid tier and retain the 4 inch display, the 6 will be the premium model and increase in size.

 

[ColdShadow]

Really? You'd take a phone that will be near worthless in a year over a newer one because it looks nicer? Is this what the conversation's come to? Next up, "5C is sucky 'cause it's just...stupid. I hate it. Stupid plastic! Don't buy it cause, dur, stupid."

I'm not saying I'd buy one, but at least it fully works with the new OS.

the feel and looks of a phone is very very important.
and 4S is not as outdated as you think.worthless in a year?? I don't think so.Apple are still selling 4s,it will be supported and have no issues for another year at least.

I just cannot stand the looks and feel of the 5c,no matter what.if 5c was the only iPhone (god forbid) I would switch to android.it's the ugliest,silliest and most unattractive Apple product ever.
when the excellent 5S exists,there is no place for 5C.

the 4S was the premium model,it was designed as a premium product,it feels and looks and still perfumes like a premium.5c is not.simple.it's kids phone.

 

[KeanosMagicHat]

Tim Cook: iPhone 5c Wasn't Meant to Be an Entry-Level Phone

The fact that he's having to explain this post launch proves 2 things.

1) Apple failed miserably to correctly set expectations of analysts, media and consumers.

2) Apple have produced a product few were demanding. There was so much talk and hype about a new entry level iPhone and instead they produce "mid-tier". With such a small price gap to the 5S, it's not even that.

They dropped the ball big time with this one, hence the awkward explanations.