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Best Buy slashes iPhone 5c pricing to $50 with in-store gift cards - Page 3

post #81 of 84
Quote:
Originally Posted by asdasd View Post
 

I doubt if that was the original strategy. However in Summer when they looked at the figures for production, they probably thought that they would get lots of orders for the 5C anyway from Japan and China, and other new markets and there was no need or available capacity, at least in the run up to Christmas/Chinese New Year to sell the 5C at the lower price - which would mean the price of the 4S.  Or they have a newer product to come early next year. Or both.

 

However they now have a pricing model where you pay $100 for more storage in the 5C, or $100 for a faster chip, 64 bit arch, M7, touch screen, faster GPU etc in the 5S. I bet sales of the 5C higher end model are low.

 

 

You got to be kidding???? Apple plan the production in Summer??? When did they order the parts for the 9M 5s and 5c they sold and how long will the supplier take to produce and deliver all those parts to Apple? Look at how many version of 5s and 5c that Apple produced around the globe. There are at least 5 versions of 5s and 5c (A1530, A1528 etc. etc.) around China region. Producing that many version of 5s/5c on top of the color/capacity variation is an organized chaos. Apple has to talk to the telecom around the world 9 months or so before launch about the features of the phone and price point of the phones. And once they gather all the order from telecom around the world (and their special requirement in term of LTE bank that their phone will support, GSM vs CDMA, TD-LTE vs FD-LTE), Apple need to figure out a launch plan and production plan that go with it. And the production plan depend on the the parts from suppliers and the order has to be in at least 6-7 months for the long lead item before production started (think you can just walk in and ask Qcom to ship Apple 9m of their LTE chip with less than a few months of ramp up time is just plan carzy).  

 

4s has been a pretty good products for Apple last year when Iphone 5 was the latest toy. You can make the same argument  last year for the $100 difference and you get the latest toys. But yet 4s sold pretty well. And you can make the same argument about 4 vs 4s last year. If you have taken any economic 101 course at all, you know demand is elastic. And there are people who won't spend any more than necessary.  The new toys in 5s is wonderful for the tech orient guy/gals (I have a 5s now), but for someone who is not interested in tech feature (e.g. my wife), 5c is doing perfectly fine. Why would they spend another $100 for features that they don't want? The number of 5c sales may not be as high as 5s (btw we need to give the 5c activation data mature a little bit more before we can tell the split between 5s vs 5c). But 5c sales bar is not set against 5s. The bar is set against the 4s sales last year.   

post #82 of 84
@xofruitcake

Apple wasn't producing the 5C in winter. Nor in Spring in any capacity. Apple ramps up a month or two (probably) before not a quarter before. Else Apple could be left with massive inventory.


I am talking about production in volume not ordering of parts. If apple were ordering parts for full production in January the 5S would not be in short supply. You seem to be talking about ordering parts for pre-production. But nobody knows yield until you got into full production.

As for elasticity of demand that's what I am arguing for when I say that price reductions will spur sales.
Edited by asdasd - 10/5/13 at 6:47am
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post #83 of 84
Quote:
Originally Posted by asdasd View Post

@xofruitcake

Apple wasn't producing the 5C in winter. Nor in Spring in any capacity. Apple ramps up a month or two (probably) before not a quarter before. Else Apple could be left with massive inventory.


I am talking about production in volume not ordering of parts. If apple were ordering parts for full production in January the 5S would not be in short supply. You seem to be talking about ordering parts for pre-production. But nobody knows yield until you got into full production.

As for elasticity of demand that's what I am arguing for when I say that price reductions will spur sales.

 

This is the quote from your original post:

 

"However in Summer when they looked at the figures for production, they probably thought that they would get lots of orders for the 5C anyway from Japan and China"

 

My point is that telecom ordering and part ordering started about 6- 9 months before launch. Around 6 months or so before launch, Apple already know exactly how many orders of what 5s/5c version (A1530 or A1528 etc...) that each telecom want and they start to plan out the production and launch strategy.  Each of model need to be certified in the country that the phone will operate (e.g. There are at least 3 versions of 5s certified in China and yet another version certified in Hong Kong which works in China network. And we have 3 or 4 version of 5s in US also) and it takes a few months to get the certification. Production schedule depend on the order they received and launch strategy and not the way you advocated.   They don't look around in summer time to figure where the demand for 5c  will come from.  They figured all these out way before they started the first production run. 

 

It is also interesting that 5c offer a 32g model while Apple only offered 16G for 4s last year. It looks like they believe that 5c is going to be viewed as a new product line by consumer and there will be demand for higher capacity 5c and it is not competing base on lower cost only. I am optimistic about 5c sales once the advertisement started in US and Europe.

post #84 of 84
Once again. I am talking about production not orders. Only when mass production starts can they estimate how many they can produce. And only then will they price. As for the higher capacity 5C I bet that is not selling at all. It's the same price as the 5S.

If Apple gauged orders from carriers based on price the 5C price would have leaked months before. As it was it was a huge surprise.
Edited by asdasd - 10/5/13 at 8:42am
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