Did Apple Make a Mistake By Releasing Two New iPhones? 348
Nerval's Lobster writes "As noted by CNET, Apple hasn't released data on the number of iPhone 5C units it presold in the device's first 24 hours of availability—a first for the iPhone since 2009. Why is that? Reporter Josh Lowensohn speculates that iPhone 5C sales 'may not be as impressive when stacked up against tallies from previous years,' with one outside analyst suggesting that Apple racked up 1 million iPhone 5C preorders last Friday, or roughly half the 2 million presales scored by the iPhone 5 on its first day of ordering availability last year. However well the iPhone 5C ends up performing on the open market, Apple's decision to launch two iPhones this year—rather than a single 'hero' device—could result in self-cannibalism, as users who would've bought the iPhone 5S instead gravitate toward the cheaper option. Cannibalism is a topic that Apple knows well, as it's been dealing with the iPhone cannibalizing the iPod for the past several years; but a new iPhone eating away at another new iPhone is fresh territory for the company. During earnings calls, Apple CEO Tim Cook likes to argue that cannibalization—whether iPhones feeding off the iPod, or the iPad taking the place of MacBooks—is a good thing, so long as it's Apple products eating other Apple products. But it's far more questionable whether he would welcome the iPhone 5C—almost certainly a low-margin device, despite its current-generation components and plastic body—taking a bite out of the more expensive, and presumably higher-margin iPhone 5S. Margin erosion remains a prime concern of investors and Apple watchers; anything that contributes to that erosion is bound to be viewed unfavorably."
Apple makes money either way... (Score:4, Insightful)
Part of the issue is that this is the "revise the device" year for Apple. Even with their immense cash reserves, it takes a lot of time to design a phone, design its form/function, test it internally, and make sure all is in order for their legal department before it makes it out the door. Then, they have to make sure the ODM/OEM are ready to produce the device in the needed numbers.
Because the 5S/5C are not "groundbreaking", Apple ends up with not as many sales as the year when they have something with a completely new design.
Another part is that the 5C models are cheaper to make, so Apple still turns a tidy profit either through lower priced, but less cost to them models or higher cost, higher overhead offerings. The 5C appears intended to help get a foothold in other markets, but in the US, it will do well against the entry level Android devices or the back-generation iPhones that are sold to keep people on contracts.
As for the "hero" phone, the 5C really isn't aimed that direction. The 5S seems to have made to toss a bone to the enterprise, adding another useful (even though this can be argued) security feature so data on the device has another layer of protection.
Re:Apple makes money either way... (Score:5, Interesting)
The narrative around Apple has certainly shifted, and this is having a tremendous impact on how people view what Apple is doing. Especially hear on Slashdot, people seem anxious for any sign that Apple is failing. That said, I would argue that the iPhone 5s is just as "groundbreaking" as any phone that's been released in the last few years. The inclusion of a 64-bit processor and the fingerprint reader are sure to be huge selling points, even if most people don't understand what 64-bit means or why it's advantageous.
I agree with you, and disagree with the summary, in stating that the iPhone 5c is almost certainly not a low-margin device. In fact, the very existence of the iPhone 5c seems to be a response to the lower margins Apple has had in selling devices that are one and two years old. The iPhone 5c is an iPhone 5 in lower-cost packaging. This serves to increase Apple's margins. People here like to give Apple a hard time, but the reality is that the iPhone 5 remains not only a usable phone, but a phone that provide a tremendous customer experience. Instead of keeping the iPhone 5 in the lineup and selling it as one of their "cheap" phones (as Apple has done with the releases of their last two flagship phones), they designed a cheaper to manufacture version that has all of the same benefits.
It is true that selling two "new" phones instead of one this year will likely decrease the number of sales for either device individually. That said, I expect that next Monday (after the iPhone 5s has actually gone on sale) there will be a press release indicating that combined sales (and pre-orders) of these two new phones exceeds the initial sale of the iPhone 5. (I'm also prepared to eat crow if I'm wrong.)
Re:Apple makes money either way... (Score:4, Insightful)
even if most people don't understand what 64-bit means or why it's advantageous.
Heck, I know what it means and still don't understand why it's supposed to be advantageous.
Re:Apple makes money either way... (Score:5, Funny)
You haven't heard Siri until you've heard her in 64-bit through your Grados!
Re:Apple makes money either way... (Score:4, Funny)
You haven't heard Siri until you've heard her in 64-bit through your Grados!
. . . in the original Klingon.
Why a 64-bit phone is good: (Score:5, Informative)
Timing... for developers.
You want to get your 64-bit processor out the door so that people who make apps that might benefit from more than 4gb of memory can start to write their apps for 64-bit BEFORE you actually start shipping phones with more than 4gb of memory. This allows them time to convert to 64-bit without being rushed into it. It also gives your OS developers time to get the 64-bit OS out the door. If the 64-bit OS isn't ready when you ship the product, you release with a 32-bit OS and you just don't advertise the 64-bit feature. (Or you say "64-bit ready" or something like that and promise the next OS release will bring 64-bit to existing phones.
In short, as a consumer, you don't care... yet. You want the 64-bit in a year or two when you have 8 gigs of memory in your phone. In order to have applications for that 8-gig phone, you want Apple to release a 64-bit phone now, so that developers will be ready with 64-bit applications to put on that 8-gig phone.
The other aspect here is that most architectures tend to clean things up when they move to 64-bit, and ARM is no exception. Some of those architectural changes that come with 64-bit will be more valuable sooner, and could translate to performance boosts right now on some applications that switch to the 64-bit architecture.
Re:Why a 64-bit phone is good: (Score:5, Insightful)
Which is the phone manufacturer that has a better record of backwards OS compatibility than Apple?
I'm curious.
Re:Why a 64-bit phone is good: (Score:5, Informative)
Bullshit.
I've written apps for iOS 7 ... that work on 3.0. Of course, the same can be done with Android if the developer has a clue. But thats not the point.
The point is how many Android phones EVER get an OS upgrade.
iOS 6 will run on phones sold from the 2009 refresh (3GS) onward to now.
A lot of small publishing/design houses got burned in the transition from OS9 to OSX.
Which ones would those be? The ones who couldn't figure out how to double click an icon and have OSX automatically fire up its OS9 compatibility layer? What publishing/design houses were even USING OS9? 1 ... 2? OS9 was shit, most stuck on OS8. OSX had relatively decent compatibility for an entirely redesigned OS, as pre-OSX ... Apples OS sucked ass as far as stability and multitasking. Within a couple years, every app that mattered had an OSX version that worked, during which time, minor updates were provided to the few souls who refused to move forward and join the modern world.
This is the way of things. Apple would have died had they not dumped pre-OSX variants, they were pretty damn close anyway.
Re:Apple makes money either way... (Score:5, Interesting)
The inclusion of a 64-bit processor and the fingerprint reader are sure to be huge selling points, even if most people don't understand what 64-bit means or why it's advantageous.
That's exactly why consumers don't care about it. In the past iPhone features have had a very visual and immediate "wow" factor that people can see the utility of straight away. App Store, 3G, Siri, Apple Maps (lol), widescreen, retina displays and so forth.
Instead of keeping the iPhone 5 in the lineup and selling it as one of their "cheap" phones (as Apple has done with the releases of their last two flagship phones), they designed a cheaper to manufacture version that has all of the same benefits.
Yes, but they seem to have missed their target. The point of the 5C was to break into markets where the 5S is too expensive to gain big market share. For years Apple fans were saying Apple didn't care about these markets and there was no money in cheap(er) phone, but actually they wanted in and just couldn't come up with a suitable product. It needed to be current generation (i.e. have a 5 in the name) to remain desirable but also be affordable, and it seems that most analysts think that it's too expensive.
Like it or not Android is offering very strong competition, and even on fairly low end hardware is now smooth and provides an excellent user experience. I recently installed Cyanogen on an old Galaxy S (~1GHz single core CPU, 512MB RAM) and it's a very nice phone. The reality is you can buy a pretty good dual core, 1GB RAM, large HD screen phone in China for a fraction of what Apple wants to charge and it's as good as the iPhone in most respects to most ordinary people.
Re:Apple makes money either way... (Score:5, Insightful)
The point of the 5C was to break into markets where the 5S is too expensive to gain big market share.
According to who? That's what pundits wanted and assumed but it should now be obvious that it's not what Apple wanted. For the time being, they're still happy with their premium device strategy. You only have to look as far back as the iPod and iPod mini to see what they're doing.
It should be noted the iPhone 4 is still being sold in China.
Re:Apple makes money either way... (Score:5, Insightful)
The point of the 5C was to break into markets where the 5S is too expensive to gain big market share. For years Apple fans were saying Apple didn't care about these markets and there was no money in cheap(er) phone, but actually they wanted in and just couldn't come up with a suitable product. It needed to be current generation (i.e. have a 5 in the name) to remain desirable but also be affordable, and it seems that most analysts think that it's too expensive.
No, that was the rumored point of the 5C - back before it was announced, when everyone assumed the C stood for "cheap," or "China." Now it is clear that wasn't it - it's the same price as the iPhone 5 would otherwise have been at this point, and internally it contains all the iPhone 5's hardware. As the poster you responded to clearly explained, the only significant change here was that it's cheaper to manufacture, allowing Apple to make a better profit off essentially the same year-old phone they would have been selling anyway.
Re:Apple makes money either way... (Score:5, Insightful)
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Like it or not Android is offering very strong competition, and even on fairly low end hardware is now smooth and provides an excellent user experience. I recently installed Cyanogen on an old Galaxy S (~1GHz single core CPU, 512MB RAM) and it's a very nice phone. The reality is you can buy a pretty good dual core, 1GB RAM, large HD screen phone in China for a fraction of what Apple wants to charge and it's as good as the iPhone in most respects to most ordinary people.
This.
The Iphone 5S competes with the Nexus 4 which is half the price, the 5C competes with Huawei phones a third of its price.
Re:Apple makes money either way... (Score:4, Funny)
You mean listening.
Re:Apple makes money either way... (Score:4, Insightful)
Too bad. The rest of the comment was insightful and completely devoid of any further grammatical errors.
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It may still be since you can memory-map more than 4GB of storage.
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Re:Apple makes money either way... (Score:4, Informative)
Not the bits themselves, but changing the architecture gave ARM a chance to clean up the instruction set and double the registers. And that IS an advantage. It's very similar to what AMD did with x86-64.
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This was certainly not the case on PC's. You began to see advantages as early as 1G because that is when some memory had to be moved away from permanently mapped memory on 32-bit. You ended up with a less than 200MB high memory area which was difficult to use effectively and you had to pay the PAE overhead to get it. Best option was to run a non-PAE kernel and forget about that last bit of memory (or run a custom memory split, if you like compiling your own kernel).
2GB was more or less ok and 3GB was a bit
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64 bit is no advantage on a device with less than 4 GB of non-upgradeable RAM.
Actually, there are several advantages. The most glaringly obvious is the fact that it has double the number of registers and that those registers double in size.
We are also changing over to ARM's redesigned version 8 of it's instruction set which adds several new types of instructions that previously didn't exist at all.
Also added is support for hardware based virtualization, as is seen on some Intel and AMD SKU's.
Re:Apple makes money either way... (Score:5, Informative)
How this keeps getting trotted out as fact every time there is a story about these phones I'll never know. And of all places, here on slashdot where people should know better.
There are many other reasons why a 64 bit architecture is helpful. You may not know of them, but they exist. Many of them apply to game development, which was a big push if you watched the initial product announcement.
Steve Jobs disagrees. (Score:3, Interesting)
Uh, you're just now tuning into the when will Apple fail meme that's about 20 years old?
20 Years!? you have no idea. this is the Video of steve Jobs in 1997 http://www.youtube.com/watch?feature=player_embedded&v=WxOp5mBY9IY [youtube.com] announcing Apple being rescued by Microsoft. This is what Steve Jobs thought "What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years.
Re:Apple makes money either way... (Score:5, Insightful)
The problem is that the iPhone 5 wasn't particularly exciting or new either. After the iPhone 5 was basically a year behind the competition when it was released people expected Apple to do more this time around to catch up, but instead they just did an incremental update.
The other issue this time around is that the 5C isn't cheap enough. It was supposed to open up China, but it's way too expensive to compete. I suppose Apple are hoping that their name will make it desirable.
Re:Apple makes money either way... (Score:5, Insightful)
Apple (even if currently reviled) is not stupid. If they want to compete on the low end in China, it won't be with the 5c at twice the price of a HTC android. Maybe it'll be a 4c at a slight premium to HTC with a similarly high margin.
*sigh* Yet More Anti-Apple FUD... (Score:5, Insightful)
Apple has shown time and again that, as far as the public is concerned, they know what they're doing.
But because they don't bring out something as amazing as the iPhone and the iPad were when they were first announced every single month, everything they do do gets panned as "not revolutionary enough," "more proof that without Jobs, Apple is DOOOOMED," etc.
So, in the minds of most of the pundits today, yes, Apple made a mistake by releasing two new iPhones. They also would have made a mistake if they had released one new iPhone, or three, or a smartwatch, or a smart TV, or a bloody time machine. No matter what Apple does, the tech press have to find ways to make it fit the narrative of "Apple is Doomed." That's pretty much all there is to it.
If you read the Macalope column over at MacWorld (and read it with a grain or two of salt, of course, because it's primarily intended to be humorous...but it still cuts deep a lot of the time), you can see him point out a lot of the glaring inconsistencies and habitual methods of trying to twist reality to make Apple's successes sound like failures. (Like the old favourite, "compare Apple's current products to hypothetical future products from its competitors.")
Dan Aris
Market share vs Profits (Score:3, Insightful)
Apple has shown time and again that, as far as the public is concerned, they know what they're doing.
Apple have shown time and again that they can maximise products in new markets by hoovering up all that ealier adopter money only to flouder in the maturing market. Steve Jobs Said. "What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years. What this cost them was their futur
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You're right, that must be why Apple is doing so horribly bad in the computer market while HP, Dell, etc. are making money hand over fist.....
Oh Wait....
Re: Microsoft wants to be an Electronics Company (Score:3)
Uhh, Google owns Motorola. So whatever few pennies that Google makes from Android is dwarfed by Motorola losses.
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Apples Shrinking Profits (Score:5, Informative)
Except Apples profits are falling
IIRC (I don't have the figures in front of me), it is their profit growth that is falling, not their profits themselves.
Dan Aris
Last two quarters
http://www.apple.com/pr/library/2013/07/23Apple-Reports-Third-Quarter-Results.html [apple.com]
"The Company posted quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion"
http://www.apple.com/pr/library/2013/04/23Apple-Reports-Second-Quarter-Results.html [apple.com]
"The Company posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, or $10.09 per diluted share. These results compare to revenue of $39.2 billion and net profit of $11.6 billion,"
Is your screen size too small to do a search before posting false information. Profits are simply falling YonY and by quarter from apples own financial statements.
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Except those of us old enough to remember the Microsoft bailout.... When Apple clearly didnt know what they were doing but instead were rehashing product lines over and over...
~sigh~ It wasn't a bail-out it was a a deal whereby MS got access to Apple's patents and Apple got to $150m and a promise to maintain development of Office on the Mac. The money wasn't a token amount, what was important was the statement from Microsoft that they thought that Apple would be around for a while.
Apple didn't know what they were doing at the time. Jobs had a vision though and the commitment from Microsoft gave him breathing room to release the iMac. The rest is history.
Self-Cannibalism is A-OK, especially for Apple (Score:5, Insightful)
Why the worry about self-cannibalism?
I believe it was Jobs that said that if you aim to protect your bread and butter, someone else will just eat you up.
So Apple has absolutely no issue with creating devices that will eat into existing product lines - take the iPod line. You had the original, then the mini, shuffle and nano. Each of which eats into each other's sales somewhat. But you still sell more this way than any other way.
Or the iPhone. It certainly ate into the iPod (group) sales, and the iPod Touch certain ate into iPhone sales (an iPhone without the phone!)
Or the iPad - it's certainly eating into Mac sales, especially lower end - people who would've bought an Air probably bought iPads instead - it does everything they needed it for anyhow.
If you innovate by trying not to compete with yourself, you end up like Kodak, inventor of the digital camera. However, the digital camera concept was not Kodak's focus, which was selling chemicals, so Kodak sat on the technology until other companies started selling them and film and chemical sales bottomed out. They could've transformed from a chemical company to an imaging one - the bulk of their sales would be chemicals, but they'd have a growing business doing all sorts of imaging - from digital cameras to printers and even having photo printers that develop to regular print paper, selling more chemicals.
If the 5C sales eat into the 5S sales - so be it. Each should compete on their own merits, and if the 5C should prove more popular, well, it means the 5S didn't deliver good value for money.
And just like it was said, they both make money. And the end goal is to make money - if you convert a Samsung user to an Apple user, a plus - who cares if they buy a 5S or 5C? It could also be if you didn't have one or the other, the user may have stuck with Samsung. And yes, there will also be users who go from Apple to Samsung.
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The most compelling argument I saw for the 5C, aside from appealing to a different aesthetic, is that it is trying to cannabilize it's own back-catalog of devices (iPhone 5,4s,etc.) that are still out there and already function as the "cheaper" iPhone. This drags that market into the future in terms of connectivity and features so that they can better sell their services and platform to all iPhone users.
Re: In summary... (Score:5, Informative)
Yeah, because Apple never had a history of introducing lower-end colored models into their lineup.
iPod. iMac.
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hehehe.
How did you get a zero score?
Speaking truth will get you flamed I guess.
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Colored models: yes.
Cheap alteratives? In your dreams!
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Hard Shell (Score:2)
Heck, since I (and many others) typically encase the phones in all manner of protective cases (I have an Otter case for my iPhone 5 and will be replacing it with a BlueTooth keyboard case soon), a plastic case isn't all that big an issue assuming reasonably similar devices (functionality, not tech specs). If you're giving your kid a phone, you might go with the C and put it in a hard shell of some sort. I've bounced mine, banged against walls, or put things on top of it that a hard case of some sort is nece
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You could just be more careful.
I have had lots of smartphones, no iphones though, and I have never used a case or a screen protector. They are all still unscratched.
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Actually I think most people are more coordinated than me. I just think bulky cases destroy the point of a thin device. Being careful is easy.
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It's still $549. That's not exactly cheap, and isn't really any different price-wise than when they simply offered the older model. Not seeing the point.
Re:Hard Shell (Score:5, Informative)
when I'm going to be paying for a carrier contract anyway
Because the math has changed recently and pre-pay is now cheaper than post-pay, unless you have some special use case. The only network where you can use your "free" 5C is on Sprint.
But once you are on Sprint, you are stuck with a 2-year contract at $80/month (let's pretend there's not a bunch of extra fees and taxes for the moment). That gets you unlimited talk, text, and data on Sprint's network. Or you could do Boost on Sprint's network for $55/month initially, with $5 reductions every 6 months until you get to $40/month.
Sprint: $0 + 24x$80 = $1920
Boost: $549 + 6x$55 + 6x$50 + 6x$45 + 6x$40 = $1689
So you are paying an extra $231 for the post-pay on the same network, all just to get a "free" phone. And with pre-pay, you can walk away at any time and just sell the phone on eBay.
Two new iPhones? (Score:3, Insightful)
Mod me down all you want, it wasn't long ago I was getting modded down for defending Apple and their yearly product releases. I can no longer find any room to defend their smartphone platform.
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Well, the 5s isn't any worse than the 5. And their platform is still pretty nice, even if they don't blow us away every single year. They are too rich for my blood, but there doesn't seem to be a high-performance Android with that form factor. I'm stuck with a cheap Android just to keep the screen size down (and my bank balance up).
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Users don't know an ARMv8 from a LEGv8. BigNum++ doesn't work alone to sell phones and users have been weaned off the MoreGehertz progression for years now. 32 more bits doesn't mean anything to Joe ShinyGlass Don'tHoldItThatWay.
This year is very much lacking in sexy. Sort
What two new phones? (Score:2)
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And it wasn't the iPhone 6, or something actually new, just new-price points to buffer marketshare dominance. Why?
Because the iPhone is just part of the revenue mix, and Apple makes more money on all the iTunes and apps you chew and use, accessorizing, and so forth. This was an iPhone 5(whatever) and doesn't do anything save combat lower price-point phones. And it's not the point at all. Apple continues to make hay while the sunshines. When that's over, they'll have handily have been able to evolve whatver
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and people just don't seem too keen on buying a plastic iphone for essentially the same price. everyone puts a bumper on them anyways so you're not even going to notice you got a 5C and not a 5.
the mistake from apple was that the C stands for Color and not Cheap. a 300 bucks, even if slower, iPhone would have flown off the shelves.
but if they can't produce them cheaper without hitting a satisfying margin then as a (smartphone)company they're fucked as smartphones turn into commodities from being luxury. the
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the mistake from apple was that the C stands for Color and not Cheap. a 300 bucks, even if slower, iPhone would have flown off the shelves.
Sure, until the next week when phone companies start subsidizing iPhone 5's at 99 cents.
I know a number of folks who only have a smartphone because AT&T was giving them away for less than a buck a pop.
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The difference between the iPhone 5C and the iPhone 5S is 16.
The difference between the Galaxy S4 and the Galaxy S3 is 1.
Upselling is not canibalization (Score:5, Insightful)
It's the oldest sales trick in the book -- you lure people in with promises of a bargain, then try to upsell them to a more expensive product. Movie theater popcorn is the classic example of this (OMG it's 2x the popcorn for only $1 more!) but electronics companies have done this for decades.
Perhaps... (Score:2)
They made a mistake of not releasing a cheap option....
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iPhone 4S, $1 on contract, not cheap enough?
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The iPhone at $1 is cheap enough. The contract, on the other hand...
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Why bring the contract into it? It's a $450 phone! Not all of us piss away money on contracts. It might be different if I were running a business from my cell phone and needed Verizon's coverage - but fortunately that's not the case.
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Because the majority of cell phone users in USA are on contracts. Heh, in fact, in Japan, the iPhone 5C (not sure if the 5S too) are free on contract.
If you're talking about the rest of the world, then, sure. That's why the iPhone 4 is still on sale in China.
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No, you miss the point. If the majority of the market is contract, the true price of the phone is irrelevant. It's what you pay that's important. Because, guess what, even if you bring your own phone, you are still paying that 2 year contract price.
Now, T-Mobile and others have started doing prepaids, and that might change things. If so, good. But the people on contracts, guess what, they will continue to pay that.
Just because *YOU* see a difference does not mean others do, or care.
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They made a mistake of not releasing a cheap option that doesn't require you to volunteer to be anally rape by a telco.
FTFY.
Low margin device? (Score:5, Insightful)
I don't see the 5C as a low end device, instead I see the 5S as a premium model. No one pays over half a grand for a low end phone.
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We don't know they'll keep that price. They could just be milking the higher paying people first before a price drop.
well yeah iphone 4s 16gb is still 550 euros here.
if 5C is low margin then I'm the mefisto pope. practically the only more expensive phone I can buy is the iphone 5S(excluding vertus). does it have something crazy like 512gb of memory? fuck no. nothing special at all, if it doesn't have one of the highest margins then their soc provider fucked them up the ass really well(and with them being the designer that's actually a possibility). and don't get started on the dirt cheap polycarbonate machined shell(that
Investors be damned (Score:2)
Sometimes I wish Apple was a private company and didn't have to look over the shoulder at "investors".
Investors felt differently (Score:2, Interesting)
Sometimes I wish Apple was a private company and didn't have to look over the shoulder at "investors".
They had the largest shareprice drop since year start in one day. The reason was 1. Because they didn't announce a deal with China Mobile and 2. Because they don't have a competitive phone in that market...they thought that would be the iPhone 5C they were wrong.
It is better than the alternative (Score:2)
The alternative was better (Score:2)
The alternative was to keep the last-generation phone still around for quite some time as the lower-end device. This way, they are able to cater to the second-rate market while still giving them a refreshed device.
The alternative was having the old aluminium versions of the old phone rather than it being rebadged and put in a plastic case and having a "c" added to the end, many people think that is a step back. I am not sure who is fooled.
Is this article more sensationalist crap? (Score:3)
Why 5C? (Score:2)
When the 4s came out, it would have been stupid to complain that the 4 didn't break presale records. The 5C isn't meant to rock you like a hurricane. It's meant to make your consolation prize more palatable.
Magic 8 Ball says "Cannot predict now" (Score:2)
the iPhone 5C - almost certainly a low-margin device
How certain is "almost certain"? Considering the history of various sites gleefully posting the component cost list of any new iPhone and pointing out that the sum is a lot less than the sale price, I wouldn't be surprised if the iPhone 5c has just as much a margin as Apple's flagship phone products. In the US
Unlocked and contract-free. costs about the same (Score:2)
Unlocked and contract-free. costs about the same as S4 at full price and the 5S costs more.
Let's look at the competition... (Score:4, Insightful)
Apple is a far smaller company that doesn't have its own manufacturing facilities. That fact alone prevents them from participating in the low end of the smartphone market -- by the time they give Foxconn or Pegatron their cut, the margin on a sub-$100 phone would be unacceptable. It would be a make-work project. By eliminating the iPhone 5 from the lineup and replacing it with the 5C, the company seems to be positioning the 5C to gradually slide into the midrange market in a way that doesn't cannibalize sales from the top of the line glass and pixie dust series.I suspect that it will be under a year before the 5C is available for $0 on contract, with a manufacturing cost that's lower than the 4 that it replaces.
WTF?! Market segmentation is now cannibalization? (Score:5, Informative)
Would you rather sell X number of one product or some factor of X (larger than 1) of two products?
Also, when you sell two new products, at the same time, it is not cannibalization, otherwise, the entire effing PC market is full of cannibals. Hell, how many similar products does Samsung have?
It's market segmentation, idiots.
Do these people even have a damned clue?!
Re:WTF?! Market segmentation is now cannibalizatio (Score:4, Informative)
Also, when you sell two new products, at the same time, it is not cannibalization [...] It's market segmentation
It might be cannibalization.
Its segmentation if the new lower tier product picks up millions of new buyers who just couldn't afford the high tier one.
But its cannibalization if millions of users who would have bought the high tier one if it was the only one one on offer, but now buy the low tier one because its available and good enough.
The key to segmentation is to make sure nobody who can afford the high end model would be satisfied with the low end one, that they would rationalize spending the extra to stay in the premium product.
About those margins... (Score:2)
Seriously? This guys thinks the margins on the iPhone 5c are *lower* than the 5s? In that case, why is everybody else complaining about how expensive the 5c is, and saying it should have been released at a $300 price point? If you believe that the 5c cou
iPhone 5 was difficult to manufacture (Score:5, Informative)
http://www.informationweek.com/mobility/smart-phones/foxconn-iphone-5-is-hard-to-make/240009249 [informationweek.com]
If you want a device you can sell for 99 bucks on contract it needs to be easier to make.
Re: (Score:3)
Indeed. They even had videos advertising the fact that it had micron-level tolerances in some of its components, and how they had some ridiculously-high megapixel camera taking pictures of each display that came off the line to determine which of something like 270 minutely different shapes for the case would fit it. That sort of manufacturing is extremely expensive and leads to lower margins, which we did indeed see with the iPhone 5 (as I recall, their margins dipped about10% since its introduction, thoug
Re: (Score:3)
I regretted writing that sentence as soon as I hit the submit button, since I hate sweeping generalizations, particularly when I catch myself making them, and the 64-bit processor is about it, honestly (at least, it's being marketed as one). So, I do apologize for implying that there were more, since I can't think of any.
iPad is not a Mac (Score:2)
I always find it hilarious that Apple articles try to spin Apples floundering Mac sales are cannibalised by the iPad, When the iPad is selling *Less* that it did a year ago, in a growing tablet market. Android is dominating on the tablet, and Chrome is growing in the laptop? market.
Can I speculate too! (Score:2)
Maybe Apple isn't releasing the figures because the 5c has 10 million units in preorders and they don't want people who would otherwise buy a 5s to figure out how great the 5c is!
Wow! Wow! Wow! That must be it. Yes! That must be it! After all, no information is as good as solid figures!
margins (Score:2)
I don't think its a good assumption that the 5c is lower margin relative to the 5s.
Apple has always sold last years model at a discount. The 5c is essentially a 5 engineered to be cheaper to produce - Plastic (err Polycarbonate) vs Aluminum and I'm guessing other tweaks as well.
The 5s on the other hand has two brand new processors the 64 bit A7 and the M7 (anyone know if the GPU is new too).
I wouldn't be surprised if the 5s is the lower margin device. I think the allowed for preorders on the 5c but not th
They didn't release enough phones, IMO.... (Score:3)
As a current iPhone user who has had over 2 years of headaches trying use such a tiny touch screen,I would be all over getting a new iPhone if Apple would release a model of phone that was phablet-sized ... bonus points if it came with a precision stylus.
(yes, I already know about the galaxy note 2, and I'm planning on getting one [or something similar, depending on what is available at the time] as soon as my current contract is up next April, but if Apple would come out with a feature-comparable phone, I'd definitely get it because then all of my existing apps will all move straight over. Such compatibility, however, is insufficient to make up for the frustration I experience trying to use it)
Re: (Score:3)
As a current iPhone user who has had over 2 years of headaches trying use such a tiny touch screen,I would be all over getting a new iPhone if Apple would release a model of phone that was phablet-sized ... bonus points if it came with a precision stylus.
Apple can't come with a phablet all that easily. The iPhone is stuck with it's 1136 x 640 resolution and this would just look crappy with a larger display. The only way they can come with a larger display is again doubling the resolution to 2272x1280 (which would give 434 DPI with a 6" display) and this is still a bit far out. Maybe next year.
Apple really had a headstart with apps due to their pixel-perfect approach, but this is haunting them now. Android is much more flexible here, even if it means somewha
Compare to density of iPad mini (Score:3)
The iPhone is stuck with it's 1136 x 640 resolution and this would just look crappy with a larger display.
How crappy would it look next to the density of the iPad mini?
faster upgrades (Score:2)
The iPhone-C is a low end device with older hardware. Which means it will become obsolete faster and owners will upgrade in shorter time than iPhone-S owners will. Also, the price difference is not all that high (550 vs 650 USD for iphoneC and iphoneS). Assuming it is $50 cheaper to make iPhone, Apple will recover that in quicker upgrade cycle. Also, it allows Apple to sell iPhone to users who would have gone most likely to Android. In fact, this is the best thing Apple could have done. Apple's recent fall
Those who forget history... (Score:5, Insightful)
The last time people thought Apple was making a huge mistake and cannibalizing their own sales was with the iPod nano replacing the iPod mini, and we saw what a *disaster* that was.
Steve Jobs even said that if Apple doesn't cannibalize their own sales, somebody else will. This is such a non-issue that it's laughable.
Apple has little choice (Score:5, Interesting)
If Apple doesn't cannibalize some of their own phone sales, lower-end Android smartphones will eat those sales. Apple is not as able to command a premium price as formerly.
Apple products are well-made, work well, work well in the Apple ecosystem, and are premium priced. In the early days of the iPhone, Apple successfully sold premium devices to customers who normally don't buy premium, because those customers couldn't get a non-sucky smartphone anywhere else. And buying an Apple smartphone, even at a premium price, still only means a few hundred dollars of extra expense.
But as the premium Android smartphones of yesterday move down and become the budget Android smartphones of today, there is less need to pay a premium to get a nice smartphone. Apple needs to compete on price.
With the 5C, Apple is trying to walk a fine line. They are trying to lower the entry-level price of an iPhone enough to keep sales that would have gone to Android phones, while at the same time they are trying not to take too many sales away from their top-of-the-line iPhone. (IMHO the plastic case is an inspired bit of product segmentation. Whether it's significantly cheaper or not, it serves as a nice differentiator between the bargain iPhone and the premium iPhone.)
I think in the USA, the 5C will serve its purpose pretty well, because most people get subsidized phones and the $100 subsidized price looks attractive. But worldwide, the entry-level phone customers will all be buying Android devices. I don't think there is anything Apple really can do about this. Their choice is either to accept lower profit margins on phones, or else watch as Android solidifies its hold on developing markets. The conservative thing for Apple to do is to keep charging premium margins; if they ever slash their prices it will be very hard ever to change their mind and go back to premium pricing.
Android had 80% (Score:3)
Apple's tiny 13%? Who is the leader? It's not like someone has 60% and Apple has "only" 13%.
http://www.idc.com/getdoc.jsp?containerId=prUS24257413 [idc.com] is the screen too small to search properly. For your information Android has 80% with Samsung being double Apple.
I had a dream last night (Score:2)
where an apple was eating me!
(adapted from Seinfeld)
Same Stratergy + Higher Mark-Ups (Score:2)
The harsh reality is the 5C designed to fool consumers in the highly subsidised American market, but fooling those customers into believing they are buying a phone at half the price $99 vs $199 (That one dollar fools people :), when the unsubsidised price is $500 more.
Apple found customers were cannibalising their latest model with their older model is sells...rather than having a range and it was killing their legendary margins. The 5C is simply a a cheaper version (using plastic and sharing some component
Did Apple Make a Mistake? No. (Score:4, Interesting)
They'll sell them as fast as they can make them and rake in huge profits.
Kind of the whole point.
Did everyone forget iPods already? (Score:3)
Seems to me that the iPhone is following the same path as the iPod to some degree.
Apple released smaller colored less powerful iPods once the market had largely run its course.
Nothing new here really. What surprises me is people acting as if all of this course Apple is following now is somehow completely new.
Re:iPad copied creative. (Score:4, Insightful)
Only point I am trying to make is that Apple didn't initially diversify. They sold one iPod.
Eventually when that played out, they started producing other ipods starting with the nano, then color nanos and their clip on thingies.
This time Apple has been selling one iPhone initially, now they are selling a parsed down version that is colorful.
I think eventually they will producing a wider variety to remain a player in the markets they can glean a profit from.
Maybe that will be in smaller clip on phone devices, maybe that will be in larger phablets.
This just seems similar to me to what they did with the roadmap of the iPod.
I wasn't even thinking of the marketshare aspect really.
I disagree Apple is sacrificing market share for profits any more than they have always done. Apple has been getting the bulk of profits from the phone market up until Samsung was a good match for them. Apple still gets 45% of the worldwide PC profits despite having only a 5% share.
Apple seems to be operating like Apple has forever and yet people seem to find that this approach is somehow flawed, as if Apple will magically disappear at some point when their phones make up some smaller percentage of the market.
Markets (Score:3, Interesting)
Consumer Market Dominant (Score:4, Interesting)
The 5S is aimed at the corporate and tech head market. The 5C is aimed at the "teens"
Bullshit. They are both squarely aimed at the consumer market, and that is exactly the right thing to do. Steve Balmer famously laughed of the iPhone as not suitable for the business market, his recent replacement thinks perhaps he should have thought differently.
Re: (Score:2)
Re: (Score:2)
Don't worry, the semi-3D-look will be the new main feature of iOS 8, because Apple responds to what their customers want!
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Re: (Score:2)
Yeah! Exactly! I mean, that's precisely what happened when Apple started releasing new less-expensive versions of their iPod alongside their top of the line iPods. When will Apple learn from their past mistakes. Stoopid Apple. /sarcasm
Re: (Score:2)
The kids already can recognize the newest, fanciest one from half a block's distance. This changes nothing.
Re: (Score:3)
I think the 5S is pretty cool.
So is a Nexus 4 or a Galaxy 4S.
All pretty nifty when one considers my first computer was an Atari 800.
Luckily I can get all 3 phones for less than my Atari cost back in the day. hehehe.