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Inside Apple's iPhone 5c: 'c' is for 'cost'

post #1 of 81
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Prior to the official announcement of the iPhone 5c, observers expected that Apple would offer its new smartphone at a competitively low price to take away market share from cheap devices running Android. But the company instead opted to stand its ground on pricing ? a controversial strategy that caught the market by surprise.

iphone-5c-color-lineup.jpg


Expectations vs. reality



For years now, rumors of a so-called low-cost iPhone have persisted. But they began to take hold earlier this year, when numerous reports consistently claimed that Apple was planning to debut a new plastic-backed iPhone this year.

With details of a new plastic iPhone gaining steam, many observers assumed that the device would be the long-fabled "cheap" iPhone. That set expectations that Apple would price its new iPhone model as low as $400 without a contract subsidy.Details on the iPhone 5c were so well known before its announcement, many assumed the device would be the company's new low-cost handset. Instead, it's Apple's mid-tier iPhone.

Prior to the announcement of the iPhone 5c, almost everything about the device was known, including its design, the colors it would be offered in, and the fact that it would have largely the same internal components as the iPhone 5. The one thing that remained an unknown was the price.

Ahead of last week's unveiling, even the name of the product was leaked ahead of time. But there was one aspect that the rumors got very wrong: The "c" in iPhone 5c didn't stand for "cheap" in any way.

iPhone


Not so cheap



Instead of reaching the anticipated $400 price point, Apple instead opted to price the new iPhone 5c starting at $549 for the entry-level 16-gigabyte model. The phone can also be had for $99 with a new two-year service contract.

Those are the exact same price points Apple has held for years with its mid-tier smartphones. Only this year, the iPhone 5c represents a newly designed model, rather than simply taking last year's flagship iPhone 5 and offering it for $549.

iPhone


Analysts have responded with disappointment, and began cutting their price targets and projected iPhone sales soon after last week's media event. The iPhone 5c has been written off by some as a bust, even before it's hit store shelves. Concern lingered through Monday, when Apple did not announce preorder figures, as it has done in recent years.Shares of Apple have slumped since the iPhone 5c announcement, with some investors viewing the $549 unsubsidized starting price as a disappointment.

The logic is that that growth in the premium smartphone market, where Apple has competed until now, is slowing. The greatest growth potential, market watchers say, is in the low- and mid-tier segments, where less expensive devices running Google's Android platform have found success.

Some observers believe Apple should react to those cheap Android devices, and take back market share in segments where it does not currently compete. They believe like with the iPad mini, Apple should aggressively move into a lower-priced market with a new hardware model.

iphone-5c-cases-backs-20130910.jpg


But the iPhone remains Apple's most profitable product lineup by far, with gross margins pegged at one point to be around 60 percent. And supporters of the current iPhone 5c strategy say that the new model will expand the iPhone to more potential customers, thanks to the variety of colors available, without sacrificing its lucrative margins.

Apple's high-margin strategy in the smartphone space has worked particularly well for the company thus far, helping it to amass more than $145 billion in cash and making it the most valuable company in the world by market capitalization. For now, it's clear Apple plans to stay on the same course that's worked pretty well so far.

Not just a plastic iPhone 5



Though the specifications of the iPhone 5c are similar to the defunct iPhone 5, Apple has done more than just replace the back of the device with colorful plastic casings.

iphone-5c-still2-20130910.jpg


The iPhone 5 came in three variants, with two different models for the most popular carriers in America, Verizon and AT&T. With this year's iPhone 5c, one model dubbed A1532 is compatible with both AT&T and Verizon in the U.S., while another A1456 model supports Sprint and CDMA networks in Japan. There are two more models as well, and one of them includes support for China Mobile's TD-LTE bands, suggesting a partnership with the world's largest carrier is forthcoming.

The handset's forward facing FaceTime HD camera was also upgraded from the iPhone 5. Apple says the iPhone 5c FaceTime HD camera now offers better low-light pictures than its predecessor.

Finally, the iPhone 5c battery is also slightly larger than the battery in the iPhone 5. It offers up to 10 hours of talk time and 10 hours of LTE Internet use, both two hours greater than the iPhone 5. Standby time has also been increased by 25 hours to 250.

iPhone 5c
Frame serves as a multi-band antenna.


To fight off the stigma of a "cheap" plastic iPhone, Apple has also detailed the process it uses to manufacture the new polycarbonate-backed handset. The company said that many plastic smartphones lack rigidity when compared to metal devices like the iPhone 5s, but Apple believes it has addressed this issue with a new construction method, attaching a steel reinforced substructure to a hard-coated polycarbonate shell.

This steel frame found hidden inside the plastic case not only makes the handset more rigid ??it also acts as a multi-band antenna for the iPhone 5c. The steel skeleton is inserted into a single, seamless piece of polycarbonate and secured with a bonding agent.

The back surface is also covered with a clear lacquer hard coat that aims to make the back of the iPhone 5c both glossy and durable.

"This whole process culminates in an extraordinarily rigid structure and a solid, dense feel that you would not expect from a plastic product," Apple design chief Jony Ive said in a video detailing the iPhone 5c manufacturing process.

Note: This is the fourth in a six-part AppleInsider series detailing features of Apple's new iPhone 5s and iPhone 5c. Previous installments are included below:

Inside Apple's iPhone 5s: 's' is for 'sensors'

Inside Apple's iPhone 5c: 'c' is for 'colors'

Inside Apple's iPhone 5s: 's' is for 'security'
post #2 of 81
Is AI going to do Sesame Street all week long.

"C" is for candlestick. This iPhone will light your fire...

"C" is for carnivore. This iPhone will eat your steak...
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post #3 of 81
C is for color... or Cookie. That's good enough for me.
post #4 of 81

Even people who do not like Apple should admire this company for one thing: this company set her course without concern about what the analysts (and many fans too) think. 

post #5 of 81
"C" stands for costs more than it should off contract.
post #6 of 81
Quote:
Originally Posted by Rogifan View Post

"C" stands for costs more than it should off contract.

 

 
LOL!
 
You're just not going to let this go, are you.  :lol:
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post #7 of 81
Ok, so what? Apple released an iPhone that wasn't cheap. Tim Cook said they were not going to make "a cheap iPhone." If people would listen to what he says, maybe all the rumors would stop. I love apple, they're where I get all my gadgets and adapters and everything. I didn't expect them to release a cheap iPhone. Personally, the iPhone 5C is very good for $100. Great for kids just starting out on a plan. If you can't afford an iPhone, or you want a really cheap iPhone, no offense, but if you can't afford a contract or pay the $549, you really should prioritize your money better rather than bad mouthing a company that is concerned with quality rather than anything else.
post #8 of 81
Quote:
Originally Posted by ealvarez View Post
 

Even people who do not like Apple should admire this company for one thing: this company set her course without concern about what the analysts (and many fans too) think. 

 

Agree. But that mettle is being put to the test. As iCahn is making his trademark move on Apple. How much influence can he exert on Cook?

post #9 of 81
Quote:
Originally Posted by island hermit View Post

Is AI going to do Sesame Street all week long.

"C" is for candlestick. This iPhone will light your fire...

"C" is for carnivore. This iPhone will eat your steak...

 

That's pretty bad rhyming for Sesame St. Just saying ... :)

post #10 of 81
Quote:
Originally Posted by StruckPaper View Post
 

 

That's pretty bad rhyming for Sesame St. Just saying ... :)

 

I never did well with my ABCs...

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post #11 of 81

C is for choice. For the first time ever, there are truly two different iPhones to choose from. You should choose based on color, cost, (back)cover, camera, capacity or functionality.

post #12 of 81
Quote:
Originally Posted by island hermit View Post

Nope. But I do hope by this time next week I'll be eating crow. 1biggrin.gif
post #13 of 81
Mid-tier iPhone that will cost %u20AC599 unlocked in Ireland? That's not an accurate classification if you ask me. 600 yoyos is a lot of money, especially in this global economy.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #14 of 81
And plus, all these leaks and rumors that've happened, like how the 5C showed up, and iOS 8 showed on MacRumors logs, do you people seriously not think apple just does that? Granted, they are very secretive, but if they just put a hook out in the water with a little leak that shows a plastic iPhone, or that shows a new OS, we're going to bite. People'll start saying apple is low on security, but actually most people got the 5C predictions wrong. It wasn't cheap, and they got a lot of the 5S wrong too, like that it was 64 bit, where was that leak? Or that it had an M7 chip, where was that one? Apple controls those leaks. If they let info leak out like that, then can prep us for buying their product. See what I mean? The more leaks we see, the more excited we become about the product. When I saw the 5S leak, I was excited about the gold one! So, that's my opinion. Apple controls what it leaks. Keeping us waiting and keeping us excited and letting us know 1/4 of the information is Apple's fail proof and clever method they've used for years (the iPhones in a bar... Like twice).
post #15 of 81
Quote:
Originally Posted by iNosey View Post

Ok, so what? Apple released an iPhone that wasn't cheap. Tim Cook said they were not going to make "a cheap iPhone." If people would listen to what he says, maybe all the rumors would stop. I love apple, they're where I get all my gadgets and adapters and everything. I didn't expect them to release a cheap iPhone. Personally, the iPhone 5C is very good for $100. Great for kids just starting out on a plan. If you can't afford an iPhone, or you want a really cheap iPhone, no offense, but if you can't afford a contract or pay the $549, you really should prioritize your money better rather than bad mouthing a company that is concerned with quality rather than anything else.
Ah so the 5C is $550 because it has magical qualities that no other plastic phone has. 1biggrin.gif
post #16 of 81
Quote:
Originally Posted by iNosey View Post

Ok, so what? Apple released an iPhone that wasn't cheap. Tim Cook said they were not going to make "a cheap iPhone." If people would listen to what he says, maybe all the rumors would stop. I love apple, they're where I get all my gadgets and adapters and everything. I didn't expect them to release a cheap iPhone. Personally, the iPhone 5C is very good for $100. Great for kids just starting out on a plan. If you can't afford an iPhone, or you want a really cheap iPhone, no offense, but if you can't afford a contract or pay the $549, you really should prioritize your money better rather than bad mouthing a company that is concerned with quality rather than anything else.

 

Well put. I agree.

Daniel Swanson

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Daniel Swanson

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post #17 of 81
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Originally Posted by DanielSW View Post

Well put. I agree.
thank you
post #18 of 81
Quote:
Originally Posted by StruckPaper View Post

C is for choice. For the first time ever, there are truly two different iPhones to choose from. You should choose based on color, cost, (back)cover, camera, capacity or functionality.

Precisely. Apple has had the 'good, better, best' program for years and each time a new phone is introduced, the previous ones drop down a level. This year, they made 'better' a new phone with new appearance (but with largely unchanged internals) rather than simply dropping the iPhone 5 to 'better'. Pricing levels are unchanged.

Why is this a bad thing, again?
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #19 of 81
Quote:
Originally Posted by Rogifan View Post

Ah so the 5C is $550 because it has magical qualities that no other plastic phone has. 1biggrin.gif
No, but that's the price it's gonna cost. They have to make SOME money to manufacture the phone. A $200 no contract iphone would be less quality, and Tim Cook said they would never do that at D12.
post #20 of 81
Has Apple ever said what the "c" stood for? Weren't people just speculating about what the model designation meant? Everyone is just constantly making assumptions about everything Apple does.
post #21 of 81
C is for "come on man" because I am tired of hearing what c and s are for.
post #22 of 81
Quote:
Originally Posted by APPLGUY View Post

C is for "come on man" because I am tired of hearing what c and s are for.

 

That sounds naughty.

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post #23 of 81
Quote:
Originally Posted by ealvarez View Post
 

Even people who do not like Apple should admire this company for one thing: this company set her course without concern about what the analysts (and many fans too) think. 

 

If Apple had listened to what analysts and pundits said, and the constant stream of advice from the "experts" that stalk sites like AppleInsider,  Apple would have ceased to exist a long time ago. The "What Apple must to do in order to survive" articles are a mainstay of the Internet. Part of the reason Apple is so talked about is the fact that they ignore the self-styled experts, and talking heads can't stand that kind of "arrogance." How dare Apple not do what I told them they must do!

post #24 of 81
c is for colon because this is so full of ____.
 
Where's the new Apple TV?
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Where's the new Apple TV?
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post #25 of 81
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Originally Posted by jragosta View Post


Why is this a bad thing, again?

 

Because many people don't need all the cutting edge hardware of the 5s or even the 5. We would like to buy an Apple phone, but Apple refuses to make a viable phone for this segment of the market. It's not about wanting a cheap phone, it's about wanting a phone that is suited to more modest needs for a reasonable price.

 

Instead, we have the choice of an 8GB iPhone 4s for $450. That's just not competitive. If that was the price for a 64GB version, then maybe we're talking. But $450 for a 2 year old device with 8GB of storage? 

 

The iPhone 5C is not a mid-tier phone. It is a different option for people in the market for a high end phone.

post #26 of 81
Quote:
Originally Posted by iNosey View Post

No, but that's the price it's gonna cost. They have to make SOME money to manufacture the phone. A $200 no contract iphone would be less quality, and Tim Cook said they would never do that at D12.
Um, there's a big difference between $550 and $200. I'm not aware of anyone here suggesting the 5C should be $200 off contract.
post #27 of 81
Quote:
Originally Posted by Rogifan View Post


Um, there's a big difference between $550 and $200. I'm not aware of anyone here suggesting the 5C should be $200 off contract.

 

$400 was the figure, right?

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post #28 of 81
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Originally Posted by Constable Odo View Post

Has Apple ever said what the "c" stood for? Weren't people just speculating about what the model designation meant? Everyone is just constantly making assumptions about everything Apple does.

 

post #29 of 81
Apple's upper-management are smart people. They know this initial release is over-priced and there are hints they've made it cheaper to make than the iPhone 5. They could cut those prices quite a bit and still stay profitable.

Keep in mind a common 'market image' technique that Apple used with the iPod and iPhone. Overprice at first to create status and then discount after six months or so to increase sales. Making the unlocked version $400 would make life difficult for competitors. Making it $350 would leave Samsung utterly in the dust and is far more sensible than these useless lawsuits.

An iPhone 5c at a lower price point would be most appealing, particularly the 12-band, multi-provider unlocked model. It'd be great for international travelers and for those who want to be able to shift carriers at will without the hassle of a new phone and a new contract. That's particularly true for those who move around a lot. A good carrier in one city is often a lousy one in another city.
post #30 of 81
Quote:
Originally Posted by StruckPaper View Post
 

 

Agree. But that mettle is being put to the test. As iCahn is making his trademark move on Apple. How much influence can he exert on Cook?

 

I don't expect anyone having much influence on someone (T. Cook) who has closely worked with S. Jobs for 14 years.  

post #31 of 81
Apple's strategy for the new tier of iPhones will be more fully realized next year. At that time the new 5c's will bump down to replace the 4s (the "cheap" model we were hoping for today).

Next year, with the 5c replacing the 4s, that model will sport an A6, 4" screen, lightning connection and unapologetic plastic, which will bring it more up to date perception wise with the current generation span... making the entry model a more appealing option when people are considering the iphone to lower end competitors (esp if they can drop the price $50, possible with cost efficiencies and ram cost drops?)

My thinking is that next years model line up will be the 6 (obviously), the 6c in colors (obviously) (with A7 and sensors, and hopefully white front faces!) and then the replacement for the now 4s (in one color, all black, in unapologetic plastic). To me a 2014/2015 line up like that feels like an overall stronger presentation and offering than with the black sheep 4s that sits in the line today.

So the current 2013/2014 line up will shore up new customers this year without breaking their margins or compromising their quality. But next years line up will be the apex of their new tiered strategy ... b/c it will advance the company's lead with a new flagship product, give the mid-market the years ahead sensors, A7 64bit tech at the c level, all of which will provide a halo to what will be a relatively robust tech packed into the 4s replacement.
post #32 of 81
I could live with the blue if it has good hand-feel and durability. They may appeal more to the teen market (where fingerprint and motion sensors, etc. are less of a draw) than the full metal deluxe units. I'd go the 5S for the higher-spec'ed camera.
post #33 of 81
Quote:
Originally Posted by RobertSmith View Post
 

 

Because many people don't need all the cutting edge hardware of the 5s or even the 5. We would like to buy an Apple phone, but Apple refuses to make a viable phone for this segment of the market. It's not about wanting a cheap phone, it's about wanting a phone that is suited to more modest needs for a reasonable price.

 

Instead, we have the choice of an 8GB iPhone 4s for $450. That's just not competitive. If that was the price for a 64GB version, then maybe we're talking. But $450 for a 2 year old device with 8GB of storage? 

 

The iPhone 5C is not a mid-tier phone. It is a different option for people in the market for a high end phone.

 

A true smartphone is a mini-supercomputer. Think about that.  How much do you expect to pay for a new PC, with a beautiful monitor, a HD camcorder, HD camera, phone, bluray player, nike fuel band.  Now shrink it down to pocketsize.  Even at $550 its an amazing price for what you get.

 

Are you really so strapped for cash that you can afford the extra $6.25 a month?  ($550-$400 / 24 months)

And look at it this way: in two years you probably can sell the 5C for at least $200.  So the true cost over 2 years is only $350.  If you buy an Android phone for $400 today, it will be worth $5 in 2 years.  Most sites don't even buy the flagship 'Galaxy S2' used.

 

Don't let the high initial price fool you.  Paying the extra few bucks a month MAKES A WORLD OF A DIFFERENCE.  I've been on Android products for the last 2 years and they SUCK. SUCK. SUCK.  My phone has never gotten updated.  I'm on a 4 year old OS.  Some of my favorite apps don't work.  My Android tablet has the same problem.  Both lag all the time, have horrible battery life, and I have to search for hours on the net to solve any techinical problems. 


Edited by sog35 - 9/17/13 at 8:35am
post #34 of 81
Quote:
Originally Posted by billnyc View Post

Apple's strategy for the new tier of iPhones will be more fully realized next year. At that time the new 5c's will bump down to replace the 4s (the "cheap" model we were hoping for today).

Next year, with the 5c replacing the 4s, that model will sport an A6, 4" screen, lightning connection and unapologetic plastic, which will bring it more up to date perception wise with the current generation span... making the entry model a more appealing option when people are considering the iphone to lower end competitors (esp if they can drop the price $50, possible with cost efficiencies and ram cost drops?)

My thinking is that next years model line up will be the 6 (obviously), the 6c in colors (obviously) (with A7 and sensors, and hopefully white front faces!) and then the replacement for the now 4s (in one color, all black, in unapologetic plastic). To me a 2014/2015 line up like that feels like an overall stronger presentation and offering than with the black sheep 4s that sits in the line today.

So the current 2013/2014 line up will shore up new customers this year without breaking their margins or compromising their quality. But next years line up will be the apex of their new tiered strategy ... b/c it will advance the company's lead with a new flagship product, give the mid-market the years ahead sensors, A7 64bit tech at the c level, all of which will provide a halo to what will be a relatively robust tech packed into the 4s replacement.

 

Great points.  People were already criticising the 5C as the 5 'cheap' months before the reveal.  Until the price came out and people HELD the phone.

 

Plastic no longer means cheap.  That's how powerful the Apple brand is.

post #35 of 81
Quote:
Originally Posted by Rogifan View Post

"C" stands for costs more than it should off contract.

 


Actually I think it will pay off big when the 5c becomes the 2 year old phone. They will be able to sell it for $400 with high margins so all 3 generations will be pretty profitable.

The bet is "will they be able to sell a lot". If those phones sell more than just selling old models they won.
post #36 of 81
Quote:
Originally Posted by island hermit View Post

Is AI going to do Sesame Street all week long.

"C" is for candlestick. This iPhone will light your fire...

"C" is for carnivore. This iPhone will eat your steak...
post #37 of 81
Quote:
Originally Posted by billnyc View Post

My thinking is that next years model line up will be the 6 (obviously), the 6c in colors (obviously) (with A7 and sensors, and hopefully white front faces!) and then the replacement for the now 4s (in one color, all black, in unapologetic plastic). To me a 2014/2015 line up like that feels like an overall stronger presentation and offering than with the black sheep 4s that sits in the line today.

Hopefully they will also have bigger screen option. If I am leaving Apple for that reason this year I can assume I am not alone so they are losing sales over this.

post #38 of 81
Quote:
Originally Posted by iNosey View Post

And plus, all these leaks and rumors that've happened, like how the 5C showed up, and iOS 8 showed on MacRumors logs, do you people seriously not think apple just does that? Granted, they are very secretive, but if they just put a hook out in the water with a little leak that shows a plastic iPhone, or that shows a new OS, we're going to bite. People'll start saying apple is low on security, but actually most people got the 5C predictions wrong. It wasn't cheap, and they got a lot of the 5S wrong too, like that it was 64 bit, where was that leak? Or that it had an M7 chip, where was that one? Apple controls those leaks. If they let info leak out like that, then can prep us for buying their product. See what I mean? The more leaks we see, the more excited we become about the product. When I saw the 5S leak, I was excited about the gold one! So, that's my opinion. Apple controls what it leaks. Keeping us waiting and keeping us excited and letting us know 1/4 of the information is Apple's fail proof and clever method they've used for years (the iPhones in a bar... Like twice).

 

Exactly. AI and MacRumors are both part of the Apple marketing machine. As soon as the new iPhone was announced ALL iPad, MacBook, Mac and other Apple news stopped in it's tracks for 24/7 wall to wall iPhone coverage. 

post #39 of 81
C never stood for cost. You all just assumed that it did. C is for Color or Choice.
post #40 of 81
Quote:
Originally Posted by sog35 View Post

Great points.  People were already criticising the 5C as the 5 'cheap' months before the reveal.  Until the price came out and people HELD the phone.

Plastic no longer means cheap.  That's how powerful the Apple brand is.
Not every company that uses plastic makes cheap crap. It's really Samsung that gives plastic a bad name. Lumia's feel quite nice. Though the hands on reviews I've seen for the 5C challenge Nokia in that department. Adding the reinforced steel frame helps.
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