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Tim Cook admits iPhone 5c share lower than expected, says demand was 'different than we thought'

post #1 of 179
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Though Apple doesn't break down sales of individual iPhone models, Chief Executive Tim Cook admitted on Monday that sales of the iPhone 5c represented a smaller mix of total handset sales than his company anticipated.



Demand percentage for the iPhone 5c "turned out to be different than we thought," Cook said during his company's quarterly earnings conference call. Total iPhone sales for the quarter were 51 million, which was a new record but below market expectations of around 55 million.

Cook declined to say what Apple is planning to do in the future with its mid-range, plastic-backed iPhone. However, the CEO did not rule out the possibility of making a change to its lineup down the road.

When asked why the iPhone 5c represented a smaller mix of total handset sales than Apple expected, Cook said he believes customers were simply drawn to the flagship iPhone 5s.

"I think the 5s, people are really intrigued with Touch ID," Cook said. "It's a major feature that has excited people. And I think that associated with the other things that are unique to the 5s, got the 5s to have a significant amount more attention and a higher mix of sales.""People are really intrigued with Touch ID" - Apple CEO Tim Cook on why the iPhone 5s has proven more popular than the 5c.

The comments come after The Wall Street Journal reported last week that Apple apparently plans to scrap the iPhone 5c this year. That report suggested that Apple will no longer make an iPhone with a plastic back when it next refreshes its smartphone lineup.

Earlier reports cited factors such as "weak sales" and "less-than-stellar sales" as prompting Apple to reduce orders for the iPhone 5c. The company does not break down sales figures for its handset business on a model-by-model basis.

This year marks the first time Apple has opted to introduce two new iPhone models. The iPhone 5c has generally the same parts as last year's iPhone 5, but comes in a new plastic casing available in an array of colors.

It's differentiated from the company's new flagship aluminum iPhone 5s, which exclusively sports the Touch ID fingerprint sensor for secure access. Some market watchers have predicted that Apple's iPhone 5c will find greater success in the long-term, as early adopters are more likely to opt for the high-end device featuring Touch ID and the 64-bit A7 processor.
post #2 of 179

It shouldn’t have been marketed as anything other than what it was: last year’s phone.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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post #3 of 179
scrapping it would be a mistake. just lower the price by 100 dollars and see what happens. lower it another 50 later and roll up emerging markets.
post #4 of 179

That's 'caus it's too expensive... why buy the 5C when you can pay a little more to get the 5S?

post #5 of 179
Quote:
Originally Posted by vlscout View Post

scrapping it would be a mistake. just lower the price by 100 dollars and see what happens. lower it another 50 later and roll up emerging markets.

While we all hate a race to the bottom, it appears as if it may make sense to lower the retail price...maybe by $50.  There is and has always been pricing pressure by competitors, but it's obvious that competition has heated up over the last year and if Apple wants to increase its installed base, it needs to lower price (a bit).

post #6 of 179
they should've known better. plastic android phones have been around for some time. The original iPhone 5 would have sold better than this infantile plastic colored device called iPhone 5c.
post #7 of 179

On the upside, you can get a used in good condition 5C on eBay right now for anywhere between 300-350 bucks. I upgraded my nephew's 4 to a green 5C after he made the Honor Roll that way.

 

I say if they sell the thing off contract for 349-399 bucks, it would move like hotcakes. It's not a bad phone, it's just priced and marketed wrong, which is weird considering this is Apple, king of targeted marketing.

post #8 of 179
Originally Posted by gimarbazat View Post
they should've known better. plastic android phones have been around for some time. The original iPhone 5 would have sold better than this infantile plastic colored device called iPhone 5c.

 

Come off it.

 

Originally Posted by jamesmcd View Post
why buy the 5C when you can pay a little more to get the 5S?

 

The same reason people bought the iPhone 4 when they could have bought the iPhone 4S or the iPhone 5: Your logic is flawed.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #9 of 179
Quote:
Originally Posted by gimarbazat View Post

they should've known better. plastic android phones have been around for some time. The original iPhone 5 would have sold better than this infantile plastic colored device called iPhone 5c.

Not in locales where the 5 didn't have a compatible chip it wouldn't. i.e. on China Mobile's LTE system.

post #10 of 179

Actually, what it shows is that Apple customers want something that's better and are willing to pay more for it. Tim listened too much to the idiots on Wall Street, provided a quality phone that cost less, and gets reamed when people want to spend more. This helped Apple's bottom line and fantastic sales but Wall Street just doesn't get it.

 

For those people who want an iPhone for free, wake up and be willing to pay for what it's worth. If you want something free, get a Samsung phone and deal with it's lack of quality.

post #11 of 179
Quote:
Originally Posted by vlscout View Post

scrapping it would be a mistake. just lower the price by 100 dollars and see what happens. lower it another 50 later and roll up emerging markets.

 

Or give it a large screen and see if that helps.  Would be interesting to see demand for large screen plastic phone or meticulously crafted metal and glass phone...

/

/

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #12 of 179
Now when I said this in the other thread Oh how people sneered. The price was wrong or the plastic was wrong. Or both. If they were keeping the old idea of "last years price" they could have kept last years model. The 5 looked great.
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post #13 of 179

It's probably for the best. I think I read that a 5c costs $25 less to make than the 5S, but sells for $100 less. They don't want to sell a 5c to anyone who might otherwise have bought a 5S, unless it means those buyers will also upgrade sooner. Making the margins even worse on the 5c might motivate even more people to buy it instead of the 5S, which would hurt profits unless it can lure enough additional Android users to make up the difference, but I think enough people decide iPhone vs. Android before choosing the specific model they will purchase that it wouldn't make sense to to drop the 5c price further.

post #14 of 179
Quote:
Originally Posted by rob53 View Post

Actually, what it shows is that Apple customers want something that's better and are willing to pay more for it. Tim listened too much to the idiots on Wall Street, provided a quality phone that cost less, and gets reamed when people want to spend more. This helped Apple's bottom line and fantastic sales but Wall Street just doesn't get it.

For those people who want an iPhone for free, wake up and be willing to pay for what it's worth. If you want something free, get a Samsung phone and deal with it's lack of quality.

You do realise no phone is actually free?
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post #15 of 179
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Originally Posted by asdasd View Post

Now when I said this in the other thread Oh how people sneered. The price was wrong or the plastic was wrong. Or both. If they were keeping the old idea of "last years price" they could have kept last years model. The 5 looked great.

I expect the 5 had to go with the increased focus on China Mobile, where the 5 was not fully compatible.

post #16 of 179
It was a silly idea from the start.
post #17 of 179
Quote:
Originally Posted by Retrogusto View Post

It's probably for the best. I think I read that a 5c costs $25 less to make than the 5S, but sells for $100 less. They don't want to sell a 5c to anyone who might otherwise have bought a 5S, unless it means those buyers will also upgrade sooner. Making the margins even worse on the 5c might motivate even more people to buy it instead of the 5S, which would hurt profits unless it can lure enough additional Android users to make up the difference, but I think enough people decide iPhone vs. Android before choosing the specific model they will purchase that it wouldn't make sense to to drop the 5c price further.

Nonsense. Smart phones are subject to price elasticity like anything else. The cheaper you go the more you sell. The plastic phone didn't sell because most people can afford $100 extra for a better looking phone. However if the cheaper one costs $200 less then you're cooking. Bad price management.
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post #18 of 179
Quote:
Originally Posted by jfc1138 View Post

I expect the 5 had to go with the increased focus on

China Mobile, where the 5 was not fully compatible.

Well they could have upgraded the 5. It's a model - it doesn't have to have last years internals. Call it the 5 LTE. Plastic is cheap. If you are going to look cheap, be cheap. Or don't look cheap and be expensive. The 5C was nowhere.
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post #19 of 179
Quote:
Originally Posted by Tallest Skil View Post
 

 

Come off it.

 

 

The same reason people bought the iPhone 4 when they could have bought the iPhone 4S or the iPhone 5: Your logic is flawed.

I think a lot of people really like the 5C's look. The comparison to plastic Android phones is flawed because the 5C does not have a plasticky look or feel to it.

 

Also, the comparison to teh 4/4S is meaningless, because I am sure Apple sold a higher percentage of 5C's as a share of the total, than they did 4's as a share of the total when the 4S came out. The problem for Apple was they were trying to establish a new line of phones with higher demand, but did not succeed.

 

I think the 5C would have done amazingly well if it was $0/$50 with contract (i.e. cheaper than Apple's historical, $100 less for the last generation phone strategy).

post #20 of 179
I think when apple develops a better energy source for their devices that just may be the next revolutionary change. Just imagining something that I'd oblige if i was alive.
post #21 of 179

Apple believes that if they build it, the customers will come. This business model is inherently arrogant but clearly works when the company sets a high engineering/design bar. But no model/philosophy works 100% of the time. Just as Apple didn't hit a home run this one time, the "I told you so" crowd simply got lucky and guessed right for once. 

post #22 of 179

I've seen as many people with Windows Phones as I have with 5c's

post #23 of 179
Quote:
Originally Posted by rob53 View Post
 

Actually, what it shows is that Apple customers want something that's better and are willing to pay more for it. Tim listened too much to the idiots on Wall Street, provided a quality phone that cost less, and gets reamed when people want to spend more. This helped Apple's bottom line and fantastic sales but Wall Street just doesn't get it.

 

For those people who want an iPhone for free, wake up and be willing to pay for what it's worth. If you want something free, get a Samsung phone and deal with it's lack of quality.

 

Pretty much. Apple has always said that it only makes sense to have a different price point if you have a different feature set. Jobs would always bring up the iPod shuffle to make that point. I think Cook has too. Aluminum vs. plastic isn't a meaningful choice. Presumably the mistake here was thinking they'd sell a bigger percentage of this "new" phone than if they'd sold last years phone, but they didn't.

post #24 of 179
Apple scraps crazy-popular products (see iPod nano), so there's no reason for them not to scrap a not-so-popular product.
post #25 of 179
This is something Apple can easily rectify. They can lower the price, they can change colors, or they can scrap it all together. They tried something and it apparently didn't work out the way they expected. Everyone who hated the idea of Apple building a plastic phone should be happy now because you probably won't see another one (other than the current 5C replacing the 4S when new phones come out).
post #26 of 179

If your flagship production is constrained by the process, machining and finishing, then it makes sense to look at alternatives that are less process intensive. In the case of the 5c, a few color changes in the mix (more muted) and a bit better pricing would have probably made a difference in sales.

 

Until we have an idea on how many were sold, it's hard to describe it as a failure. More than likely, almost any manufacturer but Samsung or Apple would have been happy with the sales volume, if not the ASP.

 

My opinion is that it was a necessary experiment, and, the data says that the Apple demographic prefers a premium build. So, Apple will go back to it's previous pattern of discounting previous models.

post #27 of 179
Quote:
Originally Posted by Rogifan View Post

This is something Apple can easily rectify. They can lower the price, they can change colors, or they can scrap it all together. They tried something and it apparently didn't work out the way they expected. Everyone who hated the idea of Apple building a plastic phone should be happy now because you probably won't see another one (other than the current 5C replacing the 4S when new phones come out).

I agree.  Come this fall, I think the 5c will stick around as the entry-level iPhone, and Apple will release two new iPhone 6 models - 4.7" & 5.5".

post #28 of 179
Sog35 will not like this.1tongue.gif

(Sorry Sog, had to rag you just a little bit, all in fun)
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post #29 of 179
Quote:
Originally Posted by StruckPaper View Post
 

Apple believes that if they build it, the customers will come. This business model is inherently arrogant but clearly works when the company sets a high engineering/design bar. But no model/philosophy works 100% of the time. Just as Apple didn't hit a home run this one time, the "I told you so" crowd simply got lucky and guessed right for once. 


Maybe so, but IMO a lot of the naysayers intuitively thought going back to plastic was a 'down grade' or at least not position correctly on price/market placement this time around. As soon as Sir Jon said he was unapologetic about the plastic... he was essentially being... apologetic. Next year lower the price once more and perhaps add in some 'mainstream' colors... I imagine it could do very well. AND offer a bigger screen... just that many more who prefer that. IMO, there is only so much more hardware tech that can be added to these devices anyways that would make it a 'must have that'. Just me, but I would like to see much enhanced Apple services/icloud etc than more hardware tech.

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post #30 of 179
Originally Posted by addicted44 View Post

Also, the comparison to teh 4/4S is meaningless, because I am sure Apple sold a higher percentage of 5C's as a share of the total, than they did 4's as a share of the total when the 4S came out.

 

 

Well, it’s not meaningless, but I don’t think you’re wrong. Thing is, how do we know?

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
post #31 of 179
There was a time when Apple used plastic cases on everything including their top of the line PowerBook and Power Mac G4. Now plastic is low-rent.

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post #32 of 179

I like the 5c form factor. If it had identical internals to the 5s (including touch ID) I'd have seriously considered one. I'd have maybe preferred a different color selection though. 

 

I suspect we'll be getting a 6c just like that (a 5s in plastic clothing).... but then I'll want the 6s, so, nothing really changes for me! :D

 

It doesn't mean the 5c "sucks". It's better than the original 5 was internally. Really it's only about the "shell", and IMO that wasn't the only reason the 5s did better than expected. The 5s is just that good! Who wouldn't pop for the extra $100 if they could?

 

51 million iPhones is 51 million iPhones. A new record, and honestly who cares if the 5c wasn't quite as "robust" as expected. It certainly didn't hold them back! Nor was it a "flop" if it ended up driving sales to the more premium device. Mhm... think about it...

post #33 of 179
Well that's what you get for listening to Wall St, Jobs was right, ignore them they know jack shit about running a business like Apple.

Need a cheaper iPhone, my arse.
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post #34 of 179
I think the 5c would of done so much better in colored metal (iPod touch style). The plastic backed cheaper option I can't see continuing but if there were colored metal options without touch ID and sold at similar pricing to 5C I would have concided buying. Perhaps this option will be available 2014.
post #35 of 179
It simply doesn't have the Wow factor people came to associate with Apple. It looks cheap. It is too polite. It was not made with passion...
post #36 of 179
Quote:
Originally Posted by AppleInsider View Post

Cook declined to say what Apple is planning to do in the future with its mid-range, plastic-backed iPhone. However, the CEO did not rule out the possibility of making a change to its lineup down the road.

 

lower the price....

post #37 of 179
Quote:
Originally Posted by hill60 View Post

Well that's what you get for listening to Wall St, Jobs was right, ignore them they know jack shit about running a business like Apple.

Need a cheaper iPhone, my arse.

 

Except the cheap phone was not cheap...  they tried to sell it at a premium price... fail

post #38 of 179
Quote:
Originally Posted by hill60 View Post

Well that's what you get for listening to Wall St, Jobs was right, ignore them they know jack shit about running a business like Apple.

Need a cheaper iPhone, my arse.

It wasn't cheaper than their previous cheap options ( ie last years model). In fact that was why the stick dropped on the announcement of the 5C.
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post #39 of 179
Quote:
Originally Posted by vlscout View Post

scrapping it would be a mistake. just lower the price by 100 dollars and see what happens. lower it another 50 later and roll up emerging markets.

Yeah, I think the way to go is make it the lowest priced model, not the mid-price.  Whether it is cheap or not the plastic casing has to make it seem cheap.  The increased margins seem like they would be worth pursuing at a different price point so when the 4S is retired the 5C might get more appealing…or it might not, but seems miscast as the mid-level entry.

post #40 of 179
Originally Posted by herbapou View Post

Except the cheap phone was not cheap...  they tried to sell it at a premium price... fail

 

IT WAS NOT A CHEAP PHONE. IT WAS NOT MARKETED AS A CHEAP PHONE. IT WAS NOT SUPPOSED TO BE A CHEAP PHONE.


What, will we still be saying this a year later? Get it through your skulls. Come on.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

Reply
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