Originally Posted by Apple ][
I was critical of the iPhone 5c pricing in a couple of threads yesterday, but I've now had more time to think about it, and guess what, I've changed my mind.
Those who know me or my posts on this forum, know that I've always been arguing that Apple should never join the race to the bottom game that virtually everybody else plays, and the good news is that with the iPhone 5c, Apple has decided not to play that game. A few ANALysts were butthurt, but screw those people, most of them are clueless. I admit that I was fooled by all of the rumors leading up to the announcement, about a plastic phone, that the C either stood for China or Cheap or Color. I had already resigned myself to the thought that this was going to be Apple's entry into the "cheap" market, and there was nothing that anybody could do about it. This is what the internet and wild speculation leads to, it makes people stupid.
Every once in a while, we get people here whining about the third world and emerging markets, and how the only thing that matters is gaining more customers. That's how some of those douchebag analysts think also. That's Android's game, making tons of crappy phones and dumping them around everywhere to undesirable customers with no money to their name.
With the iPhone 5c release, I think that Apple is saying, we're a premium brand, and don't expect anything else from us. If you can't afford an iPhone, then too bad, go buy something else, go get an Android for free and knock yourself out. An iPhone is not a human right, and if somebody lives in a poor country (so called emerging markets), and makes 5 dollars a month, then there's no iPhone in this person's future. Apple has better things to do than make cheap crap for people who can't afford anything. Does that really sound like a smart business move?
The iPhone 5c is indeed a premium product. This is not Samsung plastic that we're talking about here, this is Apple plastic, and the phone feels great according to many reports and first hand impressions. The internals are better than what would normally be Apple's number two phone this time around, the iPhone 5. The battery is larger, the Facetime camera has been improved and the LTE bands have been expanded, making the iPhone 5c better than the iPhone 5 (at least internally), and the iPhone 5 was no slouch.
And it doesn't really matter which phone people decide to choose. If somebody wants an iPhone, then they'll have a few choices to choose from. It's a win, win situation for Apple. Forget about poor people, emerging markets and all of that nonsense. Apple makes the best phones in the world, running the best mobile OS in the world, with the best app store in the world and the best apps in the world, by far. Some people line up for days to hand over their money to Apple.
Only desperate companies with no talent and poor product needs to play the pricing game by making ridiculously low priced items. That says a lot about their customer base and the worth of that customer base. Apple doesn't need to do that, and in retrospect, I'm glad that Apple decided to stick to it's principles and not make a "cheap" phone.
I'm going to disagree with you and understand up front that there have already been a few hundred posts on these topics across multiple threads. I know you're not the only person feeling this way, you just happened to be the post where I managed to jump in early in a thread rather than 200 posts into the discussion.
Apple really needs the 5C to be a low cost phone FOR THEM and it is necessary for it to be at about $400 to help stop their marketshare from shrinking to the point that factors begin working against them rather than for them with regard to volume, app eco-systems, etc.
Apple is a premium PC seller. If they were still trying to sell any Mac today for the price of the initial Mac's, they wouldn't be selling more than a handful of boxes. The Mac started at $2495 in 1984 which would be $5428.38 in present dollars. While Apple is still a premium computer maker, and while their multiple solutions across multiple price points are overall higher than most of the market, they still do not have only one real solution that costs $2500 or $5000+ dollars. If they were trying this, no one could or would defend it.
Apple introduced the iPod. The first one started at $400. While Apple still charges more than the market for the same value of MP3 or PMP, they are not charging $400 for their lowest end iPod nor are they charging $500+ inflation adjusted dollars.
We know the iPod has also been commoditized. It has solutions that go from $50 to $400.
The original iPhone started at $500 for the 4 gig and $600 for the 8 gig. $500 inflation adjusted for 2012 is $550, exactly the price of the iPhone 5C.
Mac's have had to get cheaper. iPod's have had to get cheaper. The iPhone has not gotten cheaper. No one is saying Apple has to go dive down into the territory of dual sim $150-200 Android phones. However it would not have killed them to make a $400 so that the iPhone doesn't become a niche product and end up hitting a negative feedback loop whereby they can't get certain software or hardware accessories due to the overall market being so much larger.
Apple has basically failed to drop the price of the iPhone relative to inflation, have failed to commoditize across several price points and now seem to believe they are above market forces and they have clearly already shot their wad for the entire next 12 months of phones.
Apple makes iPod nanos. They make Macbook Airs. None of these products are "cheap" nor do they prove Apple is racing to the bottom. Imagine if Apple made a Macbook Pro with retina display starting at $2200, offered a non-retina Macbook Pro at $2000 and that was the entire laptop line. We would declare them up shit creek without a paddle and no amount of defense would change that point. Instead Apple offers the Air that starts at $999. It isn't as cheap as most PC laptops but the point is that it is a Mac solution and it shows you can get a Mac without having to spend 600% more than a PC.
After 6 years, it ought to be a little cheaper to buy a new iPhone than it was in 2007. Everything else gets faster and cheaper. Apple has just gotten faster but not cheaper, literally not even by a single cent in six years. Sure the PC market raced to the bottom and made terrible $250 netbooks while Apple stood above the fray with the Macbook Air at $1000. However Apple didn't just offer only the Macbook Pro at $2200. People would worry for them and think they were nuts.
Apple likewise doesn't have to go down to $150-200 smartphones. However they are still standing at over 300% higher price and have nothing premium but mid-tier priced for the iPhone. Everyone got that the iPod Nano was not the same as the HD based iPod which retained higher pricing. No one has ever claimed a Macbook Air is better than the Macbook Pro in terms of specs and performance. Apple took the mid-tier components and kept the high end price.
It has nothing to do with Apple managing expectations. It has nothing to do with youthful colors or other nonsense. There is a race to the bottom. Apple doesn't have to go all the way to the bottom but claiming they can make all products, including plastic ones with last year's tech in it, command the same day one price as the first iPhone which had a five year headstart and no real competition, is just lunacy. Apple didn't intro the iMac and declare because they took a few things out but gave you a monitor that it should be $1499 while the Powermac started at $1599. They made it $999. It as a full third cheaper than the high end solution. It wasn't a $599 cheap ass PC.
The iPhone 5C should be a full third cheaper than the highest end iPhone 5S. It isn't and history shows Apple has made plenty of money while offering a premium experience at a mid-tier price. For some reason, they don't trust that to happen here and the concern that this could harm them long term is legitimate.