If you're going to go with a contract, you'll just pay for the 5S. That is obvious.
The other part of the market is the always increasing no-contract market. But the public was largely under the impression that the "C" in 5C meant cheap. Not so at all, at $550 and surely not with such a small screen. Therefore the 5C really does not have a market, except among diehard Apple loyalists and people who desire jarring bright plastic. Apple's poor reasoning about this will not be papered over with marketing hype.
When Larry Ellision said that he expected Apple to fail without Steve, he wasn't making an outsider's speculation: He was a close friend of Steve, and surely Steve had confided in Ellison, speculating on how things could go wrong. And now it has. A typical mistake is to over-price products out of a greed. Another is out of ignorance. Middle management, which typically live in a bubble and are well paid, want to sustain their luxury lifestyles and often do so by over-pricing products. They don't know the consumer; they don't want to.
The 5C, priced at $550, does not have a market. For $550 any consumer who is not absolutely loyal to Apple (that's 90% of people globally) will go for a quad-core, big screen Android phone. Why, the loyalists ask? Because any person with any sense will recognize that even if Android is not perfect, it is mostly OK. That's why most of the planet is going with Android. Apple is the Betamax to Android's VHS, for those of you who know history.
Can Apple still salvage the situation? Unlikely. This is a management blunder. Management problems stem from people being greedy, out of touch, and in denial.