iphone-5c

Apple

Mobile


It’s no secret that the iPhone 5s appears to be a bigger hit than its cheaper, more colorful sibling.

A new study suggests that the iPhone 5c is grabbing less share of the iPhone market than Apple’s iPhone 4s did a year ago when it was the mid-range option. The iPhone 5s, by contrast, has grabbed a larger share of the market than the iPhone 5 did in its first full quarter on the market.

The iPhone 5s accounted for 59 percent of October through December U.S. sales, according to a study from Consumer Intelligence Research Partners. That compares to the iPhone 5’s 50 percent of sales when it was the high-end model a year ago.

The iPhone 5c, meanwhile, represented 27 percent of sales, less than the 32 percent that the iPhone 4s had a year ago when it was the mid-range model. CIRP’s findings are based on a survey of 500 buyers of Apple gear during the survey period.

“The design update worked for Apple, since the would-be mid-priced [iPhone] 5 customers seem to have migrated to the higher priced flagship 5s,” CIRP analyst Josh Lowitz said in an email. “The jury is out on how successful the 5c was in attracting new customers, but we do know that Apple increased the average selling price of iPhones overall.”

The study, which appears consistent with anecdotal characterizations of 5c sales, raises an interesting question.

What if Apple had just made the iPhone 5 its mid-range option rather than designing the all-new 5c?

“If the old iPhone 5 had been the mid-priced phone, we expect that it would have sold a higher percentage of iPhones than the 5c did, as previous mid-priced legacy iPhones have,” Lowitz said. “The 5c seems to have been designed to force certain buyers to the 5s.”

The trend toward higher-end models also seems to have taken place on the capacity side, with a greater number of people opting to pay the extra $100 or $200 for models with more storage.



6 comments
laughingboy48
laughingboy48

This is something I don't quite understand.  Apple comes out with two models of iPhones and one sells better than the other.  I believe the iPhone 5s was outselling the iPhone 5c by somewhere between 2 to 1 or 3 to 1.  Everyone says the iPhone 5c is a failure because of that ratio.  Is it that the 5c should have sold more units than the 5s or should they have been more equal in terms of sales?


However, Samsung sells at least 10 different models of smartphones and I'm sure that they don't sell in perfectly equal amounts, so are all those Samsung smartphones not selling as well also considered failures?  I'm willing to bet that Apple has likely sold at least 10 million iPhone 5c units so how could that really be considered an outright failure.


Apart from Samsung, I'm sure Apple, as a single company, is selling far more iPhones than any other company on the planet is selling smartphones, so are all those other companies smartphones considered failures, too.  I think throwing around the term failure for the 5c is a bit too much.  We don't really know what Apple's sales goals were for the 5c to actually call it a failure.  Only Apple can decide that.  For all anyone else knows is that the 5c served a useful purpose if it was just made to drive more buyers to the 5s.


Analysts and bloggers don't know a damn thing about running successful companies.  Anyone can sit down and criticize with no risk taken at all.  Sometimes even the best plans fail to bring intended results.  However from what Tim Cook is saying about the China Mobile deal, Apple seems to have recovered fairly well.  Let's see what the Q1 numbers say before calling the 5c a failure.  Although I'm not sure if Apple breaks out those iPhone numbers according to model.

PCYoda
PCYoda

The iPhone 5C "failed" in the United States due to no fault of Apple at all.  In fact, the blame can probably be placed on T-Mobile.  T-Mobile was the fastest growing cellular carrier in 2nd half of 2013.  In Q4, T-Mobile (followed quickly by AT&T) offered the iPhone 5S 16GB for $0 down - the same price as they offered the iPhone 5C 16GB.  Given the indifference of upfront out-of-pocket, consumers of course opted to take the better spec phone.  Really the only people that would choose the 5C are folks that really like the whimsical colors, but otherwise why would anyone choose a poorer performance phone at the same pricing?


Apple could have tried to prevent this by instituting MAP pricing the way they do with Mac products (you can't typically advertise new current model Macs for sale for less than $5 off MSRP), but at the same time, if you're Apple, you'd probably rather see a situation where the 5S pricing causes fewer 5C units to sell than a situation where enforced pricing causes potential defections to Samsung and other device makers.  They probably made the right decision in allowing the carrier price war to work in a positive manner for consumers and enable more to afford the 5S.

gprovida
gprovida

“The 5c seems to have been designed to force certain buyers to the 5s.” you can't make this stuff up.  It follows the NYTimes article on planned obsolescence of iPhones.  


The real problem is the blogger and analysts narratives that cheap phone will result in fewer expensive phones sold while real customers see the top of the line phone with its innovative feature and capabilities a lot more desirable.  So we just make up stuff to justify our poor predictions.


What also validates Apple is of course SAMSUNG's latest "innovation" to introduce two lines of phones that is colorful plastic and classy metal.  

Sandy101
Sandy101

5c failed because of the pricing. If it was priced around $350, it would have sold easily in the emerging markets. It would have still given Apple about 40% margin. But Apple's greed knows no limits. I wish they put the same energy in innovating new products. How long would they wish to prosper on Steve Jobs legacy?

kirsch
kirsch

 Two thoughts on this:


a) The split between 5s and 5c started out with a large majority leaning towards the 5s. Anything other than this should have been very worrisome to Apple, since early adopters are more likely to buy the high end model. The press mostly painted the pictures as "the 5c is a failure". This is very misguided.


b) Introducing the 5c rather than keeping the 5 around is a good idea because it more strongly differentiates the two models, it boosts margins due to cheaper materials, simpler manufacturing process, and better yields. It also should appeal to a slightly different crowd with its colorful materials. And with the updated radios that have more LTE bands, supply chain gets simplified too.


So all-in-all, it is fair to assume that the 5c has been a solid win for Apple.

Marc (DarcFlii LLC)
Marc (DarcFlii LLC)

@PCYoda I partly agree with this. I do put some blame on Apple though. Their vision of the 5c was predicated on the theory that people prefer color to technological advancement. 

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