Originally Posted by graxspoo
I thought the whole point of the 5c was to hit a lower price point. If so, they failed.
The 5c unlocked sells for the same as the 5 does on Virgin Mobile at this point. If Samsung can make a profit selling Galaxy S IIIs for $300ish, I don't see why Apple can't make an iPhone for around the same price. A $550 phone is not going to significantly open any new markets for them. They are selling the iPhone 4 for around $300. Does the iPhone 4 really cost that much less to produce? No. Does the 5c really cost that much more to manufacture than an iPad mini? No. This is all about maximizing their profits.
Apple makes a killing on their phones. They have significantly higher profit margins than their competitors, and they get the carriers to subsidize a higher portion of the largess. This has a downside for them though. In developing markets where most people are on pre-paid plans and for people like me who would rather pay $35 instead of $100 a month for cellphone service, the iPhone looks overpriced. Apple doesn't want to lower their unlocked price because it would spoil their sweet deal with the carriers. However, this means in terms of market share, Android is going to keep kicking Apple's butt.
Why bother making a cheap phone, if it isn't cheap? For a $100 more, I'd rather get the 5s. The price differential between the two seems inadequate to make up for the difference in quality and features.
And whose whose point was this? Was it Apple's. or was it the numerous commentators who said that it was the whole point? Do these people actually know anything? No, they don't. But this phone is $100 cheaper from the beginning, and that's an important thing. Previously, Apple had to work with a phone that was more expensive, and bring the price down by $100 the second year as manufacturing became less expensive, while also accepting lower margins, because the cost didn't drop by that much. The 5 is discontinued, so the price is lower, but other than the aluminum back, the 5C is actually a better phone than the 5.
But now, they've got a brand new phone, and despite what some are saying, this is a brand new phone, that actually costs less to produce the first year. That means that next year, assuming Apple keeps this in the line, that Apple will be able to drop the price further, without losing margins, or, drop it even further than that with the same decreased margins as they have been doing.
Apple couldn't keep the 5 in the line this year and have the 5C, because the 5C likely costs as much as the 5 now costs to produce, and, most importantly, the 5 doesn't have the radio to work on China Mobile's 3 and 4g, which the 5C does have. I imagine that there would be no good way to keep the 5 around.
As to costs, the 5C has a new, better FaceTime camera, a new motherboard, a new multiband radio which has more bands than any other non Apple smartphone, and a larger battery. So, you see, this is an entirely new phone, despite using the same SoC. so manufacturing costs are higher than they would be with a recycled 5 interior in a cheaper case. And that cheaper case isn't THAT much cheaper.
Another thing you've said that isn't true is about subsidies. It's been shown that Samsung gets even higher subsidies for their top line Galaxy S series.