Apple keeps 8GB iPhone 4S around as free-on-contract option
In introducing its new iPhones on Tuesday, Apple both adhered to tradition and shook things up, dropping the iPhone 5 but keeping the iPhone 4S alive as the low-end model.
Apple's iPhone media event on Tuesday brought little in the way of surprises regarding Apple's bestselling devices. As expected, Apple rolled out a lower-cost iPhone 5c and a high-end iPhone 5s with a built-in biometric security feature. As had also been predicted, Apple kept the two-year old iPhone 4S around as the low-end, on-contract option.
Well-connected KGI Securities analyst Ming-Chi Kuo predicted that the iPhone 4S would stay in production even as the iPhone 5 made way for the iPhone 5c. Apple's polycarbonate backed iPhone 5c packs the same internals as the iPhone 5, but with its slower processor and smaller display, the 4S may be even cheaper still for Apple to manufacture.
Retaining the 4S is in keeping with standard Apple procedure since the introduction of the iPhone 4 in 2010. That year saw Apple keeping the 4's predecessor ? the iPhone 3GS ? in rotation as a cheaper option. The next year, with the release of the iPhone 4S, the iPhone 4 moved into the 3GS' former slot, while the 3GS moved on to an even lower on-contract price point. Now, the iPhone 4S will occupy that bargain-level entry point, available in an 8GB model for free with a two-year contract.
In offering only one memory configuration for the entry-level iPhone, Apple likely also reduces manufacturing and inventory costs. Apple's margins on the device may be aided even further by changes to its manufacturing strategy. The iPhone maker is expected to go with Pegatron for more than half of its legacy iPhone 4S orders. Apple will still rely on longtime partner Foxconn for much of its iPhone needs, but the move to a competitor for the cheaper iPhone option will likely help improve margins on the already low-priced device.
Even as the device showed began to show its age, the 4S was still the second-most popular smartphone in the world, according to figures from Strategy Analytics, beating out even Samsung's Galaxy S3, which had been released after the 4S. The 4S trailed only its successor, the iPhone 5, in terms of worldwide popularity.
Apple's iPhone media event on Tuesday brought little in the way of surprises regarding Apple's bestselling devices. As expected, Apple rolled out a lower-cost iPhone 5c and a high-end iPhone 5s with a built-in biometric security feature. As had also been predicted, Apple kept the two-year old iPhone 4S around as the low-end, on-contract option.
Well-connected KGI Securities analyst Ming-Chi Kuo predicted that the iPhone 4S would stay in production even as the iPhone 5 made way for the iPhone 5c. Apple's polycarbonate backed iPhone 5c packs the same internals as the iPhone 5, but with its slower processor and smaller display, the 4S may be even cheaper still for Apple to manufacture.
Retaining the 4S is in keeping with standard Apple procedure since the introduction of the iPhone 4 in 2010. That year saw Apple keeping the 4's predecessor ? the iPhone 3GS ? in rotation as a cheaper option. The next year, with the release of the iPhone 4S, the iPhone 4 moved into the 3GS' former slot, while the 3GS moved on to an even lower on-contract price point. Now, the iPhone 4S will occupy that bargain-level entry point, available in an 8GB model for free with a two-year contract.
In offering only one memory configuration for the entry-level iPhone, Apple likely also reduces manufacturing and inventory costs. Apple's margins on the device may be aided even further by changes to its manufacturing strategy. The iPhone maker is expected to go with Pegatron for more than half of its legacy iPhone 4S orders. Apple will still rely on longtime partner Foxconn for much of its iPhone needs, but the move to a competitor for the cheaper iPhone option will likely help improve margins on the already low-priced device.
Even as the device showed began to show its age, the 4S was still the second-most popular smartphone in the world, according to figures from Strategy Analytics, beating out even Samsung's Galaxy S3, which had been released after the 4S. The 4S trailed only its successor, the iPhone 5, in terms of worldwide popularity.
Comments
Nobody cares about "on contract" price anymore, even the US is moving to separate phone/contract models slowly.
But given the dreadful price of the 5C, it's good they kept the 4S.
The iPhone 4s was a very good phone when it was released, but it is really starting to show it's age now. But there are still people that swears by the it's superior one hand usability, and I guess it is the perfect phone for them. I hope Apple bring out a 5 inch Iphone next year.
Of course they do, and since when?
$99. How dreadful, as it's exactly the same price the iPhone 5 would have been had they kept it.
No, they didn't.
How does that make any sense?
I'm sure they want to standardize on the Lightning connector and 4" display, but ultimately it's about dollars and cents. Shoving the 4S guts into the 5C body (what I predicted the 5C would be) must have a higher cost than continuing production of the 4S unchanged. Therefore Apple is willing to wait until 2014 to finally put the 30-pin connector out to pasture.
They're also in no rush to change a pricing model that yields greater than 1000% margins on flash memory. A quick look at SD card pricing shows a $10 difference between 16GB and 32GB yet Apple has conditioned its sheeple to pay $100.
At this point my expectations for the upcoming iPad and Mac events are about as low as they could possibly be.
With a bigger battery and better front camera.
The 4S should have changed the connector or just dumped it. Oh well- we can wait a year.
Yeah. So what's the point of the plastic?
And for China, I'll bet they have done a deal to lower their margins on the 5C to make it acceptable to China mobile, yet as the 5C is cheaper to make they can still keep their margins at a level they want while offering the phone at a price the Chinese consumer will bear.
It may not be what Wall Street wanted, but provided the 5C in China is cheap enough to sell it may be a very clever compromise.
time will tell.
Remember the 2 year upgraders probably bought 4S at full price. For them the replacement is the 5S. The place where they need to be aggressive on price is China, not Europe or the USA where market share is actually holding up well.
Yeah. So what's the point of the plastic?
More durable, especially if you don't want to use a case.
Surely, with a new 8GB configuration, they will update to lightning connector? I don't see them keeping the 30-pin connector for legacy customers ... Just one more excuse to not buy current products.
According to their website, it will use the old connector.
Makes no sense, but still.
More durable, especially if you don't want to use a case.
Than metal? Wait a minute. Which one cracks, again? And which one is used to make every building of the modern era?
I don't understand the iPhone 5c. It's just the iPhone 5. Maybe it's true that they cannot make current iPhone 5 in those color so they need to change the chassis to have plastic coated for color. They should've still made iPhone 5 available and make iPhone 5c start at 8GB for free with subsidy. BTW, Effing Apple. No upgrade for my family of 3.
Except with different telephony, a better front camera, a larger battery, and in colors. So not just the iPhone 5.
And how is this Apple's fault?
Jony Ive said it was 'unapologetically plastic' in the video:
http://www.apple.com/iphone-5c/videos/#video-product
I think it should apologise for being plastic and not a cheaper iPhone 5. The 5C looks quite nice in use in the video but those cases don't look good at all - the color matched ones are ok but there's no need for the holes in that case. The fact they went to so much trouble with their own cases even hints that they expect people to buy cases for them i.e the plastic is not to avoid cases. They have cases for the 5S too. I don't remember them doing this before. They had bumpers but I don't remember there being official Apple cases.
I know they've said that the plastic is done in a way to feel robust but the build quality is clearly higher on the cheaper iPhone 4S. I notice they don't say the display is IPS for either the 5C or 5S, I'm pretty sure they used to list the panel type. It says Retina display so I assume it's still an IPS panel. It's hard to make out in the video any color shifts when turning it:
http://www.theverge.com/2013/9/10/4714074/apple-iphone-5c-hands-on-pictures-video
You can see the cases there, yellow on pink, blech. Why even put that on display?
All available color combinations do work well together. It's the setting–the fact that they're on a phone–that makes them situationally good or bad*. But I believe that some of them are Apple giving a slap in the face to Windows 8's atrocious colors. "See, it's not the colors that make your OS sell poorly, it's your OS!"
*I'm trying to remember where I've seen these colors together in a beautiful way… I'll think of it.
Of course they do, and since when?
$99. How dreadful, as it's exactly the same price the iPhone 5 would have been had they kept it.
Dear Mr. Out-of-context-Quoter,
way to twist his words around.
I think he was referring to the $549 starting price off contract.
Apple is so smug they think that a re-branded iP5 with plastic back should be this much? For people like me, off-contract pricing is a huge deal. Being out of the country for 5 months of the year, I need the All-in-one device that can replace my iPhone 4, iPod Classic, and potentially my iPad2 with a single device. Apple missed the mark on all three of those for me.
Don't get me wrong, the iPhone 5S has some really nice innovations, and the 5C is nothing to sneeze at, but for people who need to consolidate, these two new offering just does add/subtract anything from my existing needs.
I have no idea what I'm going to do before my next trip to China, but I certainly won't be the single device. I'll prolly have to suck it up to contract pricing on a new phone and wait to unlock it, then use my iP4 in China. Still sucks because I could use those security features and camera improvements over there.
Why keep the 4S with the old connector?
That was exactly what I was thinking. After the iPad updates, the iPod classic and the iPhone 4S will be the only two devices using the 30-pin connector. To me, that one of a couple really bad decisions Apple made with this event.