It has been clear for a while now that the colorful iPhone 5c hasn’t been the hit that Apple was hoping for.
That point was put in black and white throughout Apple’s quarterly earnings report on Monday.
It was clear as the company reported iPhone sales of 51 million units — a record, but not the 54 million or more figure that some analysts were expecting.
The iPhone 5c disappointment was most clear in North America, where Apple’s sales actually dropped from a year ago even as they rose steadily in most of the rest of the world.
“In North America we did not do as well,” CEO Tim Cook said during a conference call with analysts.
Part of the problem, Cook said, was the fact that when the company forecasted demand for the holiday quarter, it expected the 5c to make up considerably more of its sales than the product did, resulting in a shortage of the higher-end iPhone 5s that customers preferred. The company spent the rest of the quarter trying to adjust for demand, Cook said.
Of course, there are plenty of positives for Apple if customers go for a high-end model over a midrange one. It means more sales dollars, and puts a greater number of customers on the latest technology, most notably the fingerprint-sensing Touch ID system (which Cook acknowledged could make for a nice payment system).
The longer-term question, though, is how well Apple can compete at the lower end. Analysts did their usual job pressing Apple for details on whether it might go differently or more aggressively beyond the high end of the smartphone market. Cook didn’t rule anything out or in when it comes to pricing.
“Our line in the sand is making something that’s not fantastic,” he said.
And speaking of fantastic things, Cook promised lots of them for 2014, though without any specifics. The most Cook and other Apple executives would say is that Apple’s new products this year would come both in areas where the company has products today and some new areas where it doesn’t.