The biggest disappointment of the 5C being the price. I think that is the amount agreed on by Apple and their biggest customer.
Problem is that customer does not want to come on board until the beginning of the year, the talk is that they want to finalize some work on the 3G or 4G coverage.
You imagine how things would have gone if Apple would have priced that phone $100. less in China.
Lot of China Mobiles customers would have bought their phone thru the other carriers there.
I think there will be a price correction as soon as C. M. announces that they are ready to sell Apple.
I wouldn't put too much stock on what's being written on MR. That place is overrun by psychopathic fandroids in urgent need of a reboot...
In my opinion the Apple crowd has been somewhat spoiled. Last year, when the iPhone 5 was released, all three iPhone offerings were of premium built quality. You really couldn't go wrong purchasing either of them. Today you have the premium 5s, the "PLASTIC" 5c and the Premium 4S. That's confusing to most. Imagine BMW releasing an M5 that "looks" like the Prius yet both the M6 and M3 being the high quality sportscars we know currently. It is really odd that Apple's mid range offering is of lower PERCEIVED quality than the lower range one... Obviously Apple has done this to save on production costs and increase profit margins but it is so damn obvious that many people find it hard to accept. Amateurish yes, yet they're very honest about it.
I totally get the idea of the 5C though I'm still a bit unclear on the positioning. I think it's great Apple is building a portfolio around iPhone. And I think for the 5C target market they're not going to give a shit that its plastic and not glass or aluminum. As long as it feels good and looks good it will sell and people will probably be happy they don't have to be as concerned about nicks and scratches. I think 5C was more about product differentiation than anything else. And maybe Apple's way of saying plastic doesn't have to equal "cheap". I'm still not convinced on the pricing and I don't understand why the 4S is still hanging around. Keeping the 4S in the product line baffles me. I don't care how cheap it is to produce these days.
No, this is rubbish. Its an improved iPhone 5 with major market appeal in the way of the casing that doesn't suck (the iPhone 5 is fragile POS), and attractive color offerings.
The iPhone 5C is the best physical design ever to wrap an iPhone.
I find some of the colors ugly, but that is neither here nor there, as I'm getting a 5S.
Wait....you say the iPhone 5 is a fragile POS but you're buying the 5S? Won't that just be another fragile POS based on your criteria?
I wouldn't buy one at $400 because I own a 32 gig iPhone 5 and when I decide to upgrade again, it will be to a minimum 32 gig iPhone 5S or future equivalent. However both my kids are rocking iPhone 4's and one really was hoping for a new iPhone for his birthday. He knows selling his iPhone 4 plus birthday money won't get him to $650+ dollars. However I know for a fact it would have gotten him to $400-450. That right there is a lost sale. We are on T-mobile and don't do contracts. Basically Apple will have to hope his eye doesn't start straying to Android solutions.
You could easily hold out until the 6S, but your kids, wow they are in a rut with that budget, but not entirely, if they are very attached to Apple and the ecosystem, why not get the iPod touch + a cheap robust feature phone. But iOS7 will support iPhone 4, so that will prolong the fun with their existing phones.
I'm guessing, I've read others say this too, next year, 5C will take over the 4S position, 2 year old hardware, $450 probably.
The reason why the 5C is considered a failure is because it will fail to expand the iPhone's market reach beyond where it already is (ie subsidized carriers and wealthy consumers).
The hope investors and many posters here and abroad had was the 5C would be the iPhone to reach people that couldn't access an iPhone before (ie expand the iPhone's market reach).
The 5C won't do that at all.
IMO it has the potential to steal 5S sales because its competing for the same buyers. Have any of you thought of that yet?
There's a limited amount of people that can afford $550+ around the world and both the 5S and 5C are competing for the same limited buyers.
The beauty of placing the 5C in a different price bracket was it wouldn't compete for the same high end wealthy buyers that can afford $550+ smartphones. It could have and should have been competing against Samsung in the midrange $300-500 price range where Apple currently has no strong presence.
People buying the 5S wouldn't have considered a $400 5C anyway.
Also the argument about profits and margins is laughable.
When was $400 ever considered cheap? If Appke can make a profit on iPods and iPads that cost less why the hell do some of you think of te 5C were priced at $400 Apple would get no profit and lose money on it? Foolishness.
On a serious note though, I feel quite unhappy about iPhone 5C. I think in my dictionary, I can call it a fail Apple product (not because it won't sell, but because as an Apple product, it fails to win my heart).
Personally, I think it would have been about 23.45 times better if iPhone 5C was never introduced. iPhone 5 is much much better looking and now would have costed the same. iPhone 5C could have made some sense if it would cost about $400 unlocked. But the fact that Apple would replace a perfectly sexy iPhone 5 with an awful-new-Ive-design-philosophy-inspired 5C, doesn't make me feel good.
Anyone sharing my thoughts about 5C?
Multiple items offered to multiple people all with different taste or ONE product that only sells to people with ONE sense of style?
I welcome Apple broadening it's appeal, even though I'm getting the 5s. But then I remember their first laptop....
I guess you would want BMW to sell a $15,000 car also?
Or Louis Vutton to sell $99 bags?
Or Rolex to sell $300 watches?
I for one would have purchased the 5C for $400. But I'm getting the 5S. There would have been MASSIVE canibalization if the 5C was $400. The 5S looks just like the 5, the 5C looks totally different. It would have been a too good bargain.
And stop comparing iPod/iPad costs to iPhone. The iPhone is Apple's bread and butter. They can't be sacrificing 25% of their margins for the business unit that accounts for 65% of their profits.
Don't forget that China Unicom and China Telecom both SUBSIDIZE iPhones. Soon China Mobile will also.
A $400 phone is no where close to the analogy of a $15,000 BMW.
$400 is still a lot of money. Remember most Android phones are $200 or less.
A plastic iPhone could have and should have been a profitable venture for Apple and could have been $400 no problem.
It's really quite simple. Who knows more about the phone market - you or Apple? I'll give you a second to think about it, but I'd put my money on Apple.
Cutting the price by $150 (as you are suggesting) would do a number of things:
1. Cut their gross margin dramatically - which would cause the stock to plummet even worse than it did yesterday.
2. Destroy Apple's market positioning as only selling high quality phones
3. Reduce sales of the 5S - which would erode margins further and damage Apple's market positioning since their flagship phone would not sell as well
4. It would increase sales, but no one has suggested how much. Apple products tend to have only very limited price elasticity, so a price cut might not have any significant effect on volume - and almost certainly wouldn't be enough to make up for the lower margins. A quick back of the envelope calculation suggests that Apple would have to sell about 4-5 times as many phones to make up for the price cut that you're suggesting. Since they already have something like a 20% market share globally, that's not going to happen - so your price cut would hurt more than it could help.
As for losing ecosystem support, there's absolutely no sign of that happening. Apple's ecosystem is where developers go to make money - and that's not likely to change.
In the end, please demonstrate why your knowledge of the phone market is greater than Apple's before shooting off your mouth.
And, boom goes the dynamite. I even ran some of the basic numbers and there is no way in the world it would ever have made sense to price it any differently. None. Even an 8 GB model at $100 less would have been disastrous to revenue.
Honestly will these little children with no critical thinking skills ever go away? They embarrass themselves to no end with their lack of knowledge, yet insistence upon barking a bunch of uninformed nonsense.
A $400 phone is no where close to the analogy of a $15,000 BMW.
$400 is still a lot of money. Remember most Android phones are $200 or less.
A plastic iPhone could have and should have been a profitable venture for Apple and could have been $400 no problem.
You are completely uninformed and lack any relevant knowledge to comment on the situation. Making such a statement as the bold disqualifies you from even the vaguest consideration of attention to future comments.
Some of you hating the $550 price need a REALITY check. Apple is in the business to make money. Here is a quick calculation that shows what would happen if Apple priced the 5C at $400 vs $550.
Most insiders agree that Apple makes about 55-65% gross margins on the latest iPhone. For the calculation I'll use 57.5% gross profit for the 5S.
Example 1:
5S for $650, gross margin 57.5%, 65 mil units a year
5C for $550, gross margin 57.5%, 65 mil units a year
Total units sold: 130 mil
Total gross profit: 44,850,000,000
Example 2
5S for $650, gross margin 57.5%, 58.50 mil units a year
5C for $400, gross margin 39.5%, 145.50 mil units a year
Total units sold: 204 mil
Total gross profit: 44,853,000,000
I'm assuming that at $400 the 5C will canabalize 10% of 5S sales.
Apple would have to sell 74,000,000 more iPhones just to make as much profit!
Thats an increase of 57% more unit sales just to break even.
Lets say Apple only grows units by 25% with a cheap 5C. They would actually make over SIX BILLION less in gross profit.
I'm sorry but a $400 5C would hurt the company unless their unit sales exploded to almost 60%+
It would be stupid to take such a huge risk all at once. But i do see Apple selling C's at discounts in markets such as China/India once the intial sales fury ends
heres an excellent article that backs up my calculation:
Your post will be ignored by the wealth of trolls. I can't even call them trolls really, they are just whiny uninformed brats that have absolutely no idea what they're talking about. Your post is the truth.
Its just funny to me.
Apple knows WTF they're doing...
...the numbers corroborate it....
Yet Forum Whiners think they know better. Ok...throw us some numbers, forum whiners, and show us all how Apple is Doomed.
The reason why the 5C is considered a failure is because it will fail to expand the iPhone's market reach beyond where it already is (ie subsidized carriers and wealthy consumers).
.
Nostradamus, is that you? Will you eat your words when the 5C becomes the #1 or #2 phone model? Or will you quantify your prediction by saying the 5C should sell 100 MM in 2013, anything less is a failure?
You are completely uninformed and lack any relevant knowledge to comment on the situation. Making such a statement as the bold disqualifies you from even the vaguest consideration of attention to future comments.
In other words, shut up.
You obviously know no more than I do.
If Nokia's can sell high end plastic phones for $200-300. Apple could have made a profitable 5C for less than $550.
No one here knows the build cost for this phone. The manufacturing costs are obviously lower than the 5/5S and its internals are all old as well.
IMO with the little we do know the phone could have been profitable for less than $550.
Nostradamus, is that you? Will you eat your words when the 5C becomes the #1 or #2 phone model? Or will you quantify your prediction by saying the 5C should sell 100 MM in 2013, anything less is a failure?
We'll see what happens.
I think the 5C is a great device for the wrong price. In the US it'll probably do well because Americans are blinded by subsidized price models. Overseas though I'm not too sure.
To spin your question another way, if Apple offers a lower price 5C before next year would you eat your words?
I feel people tend to forget that the price set for a product is determined what your production cost and possibly engineering and marketing, overhead etc are, what market segment you want to reach, what profit you want to make and brand impact overall. If some point out that other products' prices dropped then this is a consequence of at least one of the factors mentioned above. If eg Macs or iPods are not Apple's main business anymore they can afford smaller profit more easily. Over time technologies in making and assembling parts becomes more cost efficient and you can bring down price without sacrificing profit. Only lowering price in order to make it more affordable is not how it works. And should Apple indeed be off their targets they will act and lower the price or kill the product. The market will sort it out. However, once you've established a price point doing the opposite and going up is hard to do unless you have a monopoly. Overall, I'm curious but not worried. iPad eg was a much bigger risk from my POV.
I think the 5C is a great device for the wrong price. In the US it'll probably do well because Americans are blinded by subsidized price models. Overseas though I'm not too sure.
To spin your question another way, if Apple offers a lower price 5C before next year would you eat your words?
I never said the price was right, bob barker, but I never said it was wrong either. Apple would know better than I would.
Um didn't Nokia just got bought out by Microsoft? How's that strategy going for them.
I mentioned $200 Nokias and Androids to add context, which a lot of people here are lacking.
$400 is NOT cheap for a phone as some here are now saying. Actually some of you were saying $400 was the right price before Tuesday because its high enough for Apple to make a profit but low enough to differentiate it from their premium offering.
We all can agree Apple will never make a cheap bargain phone. But a midtier phone? We all assumed that's what Apple would give us. I don't consider $550 midtier.
Comments
If I recall 16:9 was also considered junk.
So was HDMI on a laptop.
The biggest disappointment of the 5C being the price. I think that is the amount agreed on by Apple and their biggest customer.
Problem is that customer does not want to come on board until the beginning of the year, the talk is that they want to finalize some work on the 3G or 4G coverage.
You imagine how things would have gone if Apple would have priced that phone $100. less in China.
Lot of China Mobiles customers would have bought their phone thru the other carriers there.
I think there will be a price correction as soon as C. M. announces that they are ready to sell Apple.
I totally get the idea of the 5C though I'm still a bit unclear on the positioning. I think it's great Apple is building a portfolio around iPhone. And I think for the 5C target market they're not going to give a shit that its plastic and not glass or aluminum. As long as it feels good and looks good it will sell and people will probably be happy they don't have to be as concerned about nicks and scratches. I think 5C was more about product differentiation than anything else. And maybe Apple's way of saying plastic doesn't have to equal "cheap". I'm still not convinced on the pricing and I don't understand why the 4S is still hanging around. Keeping the 4S in the product line baffles me. I don't care how cheap it is to produce these days.
The 5S should have been simply, the iPhone.
I rather think Apple knows what "should have been" better than you.
White, blue, green, yellow, pink. In that order.
I wouldn't buy one at $400 because I own a 32 gig iPhone 5 and when I decide to upgrade again, it will be to a minimum 32 gig iPhone 5S or future equivalent. However both my kids are rocking iPhone 4's and one really was hoping for a new iPhone for his birthday. He knows selling his iPhone 4 plus birthday money won't get him to $650+ dollars. However I know for a fact it would have gotten him to $400-450. That right there is a lost sale. We are on T-mobile and don't do contracts. Basically Apple will have to hope his eye doesn't start straying to Android solutions.
You could easily hold out until the 6S, but your kids, wow they are in a rut with that budget, but not entirely, if they are very attached to Apple and the ecosystem, why not get the iPod touch + a cheap robust feature phone. But iOS7 will support iPhone 4, so that will prolong the fun with their existing phones.
I'm guessing, I've read others say this too, next year, 5C will take over the 4S position, 2 year old hardware, $450 probably.
The reason why the 5C is considered a failure is because it will fail to expand the iPhone's market reach beyond where it already is (ie subsidized carriers and wealthy consumers).
The hope investors and many posters here and abroad had was the 5C would be the iPhone to reach people that couldn't access an iPhone before (ie expand the iPhone's market reach).
The 5C won't do that at all.
IMO it has the potential to steal 5S sales because its competing for the same buyers. Have any of you thought of that yet?
There's a limited amount of people that can afford $550+ around the world and both the 5S and 5C are competing for the same limited buyers.
The beauty of placing the 5C in a different price bracket was it wouldn't compete for the same high end wealthy buyers that can afford $550+ smartphones. It could have and should have been competing against Samsung in the midrange $300-500 price range where Apple currently has no strong presence.
People buying the 5S wouldn't have considered a $400 5C anyway.
Also the argument about profits and margins is laughable.
When was $400 ever considered cheap? If Appke can make a profit on iPods and iPads that cost less why the hell do some of you think of te 5C were priced at $400 Apple would get no profit and lose money on it? Foolishness.
I smell triskaidekaphobia. Lol.
On a serious note though, I feel quite unhappy about iPhone 5C. I think in my dictionary, I can call it a fail Apple product (not because it won't sell, but because as an Apple product, it fails to win my heart).
Personally, I think it would have been about 23.45 times better if iPhone 5C was never introduced. iPhone 5 is much much better looking and now would have costed the same. iPhone 5C could have made some sense if it would cost about $400 unlocked. But the fact that Apple would replace a perfectly sexy iPhone 5 with an awful-new-Ive-design-philosophy-inspired 5C, doesn't make me feel good.
Anyone sharing my thoughts about 5C?
Multiple items offered to multiple people all with different taste or ONE product that only sells to people with ONE sense of style?
I welcome Apple broadening it's appeal, even though I'm getting the 5s. But then I remember their first laptop....
A $400 phone is no where close to the analogy of a $15,000 BMW.
$400 is still a lot of money. Remember most Android phones are $200 or less.
A plastic iPhone could have and should have been a profitable venture for Apple and could have been $400 no problem.
It's really quite simple. Who knows more about the phone market - you or Apple? I'll give you a second to think about it, but I'd put my money on Apple.
Cutting the price by $150 (as you are suggesting) would do a number of things:
1. Cut their gross margin dramatically - which would cause the stock to plummet even worse than it did yesterday.
2. Destroy Apple's market positioning as only selling high quality phones
3. Reduce sales of the 5S - which would erode margins further and damage Apple's market positioning since their flagship phone would not sell as well
4. It would increase sales, but no one has suggested how much. Apple products tend to have only very limited price elasticity, so a price cut might not have any significant effect on volume - and almost certainly wouldn't be enough to make up for the lower margins. A quick back of the envelope calculation suggests that Apple would have to sell about 4-5 times as many phones to make up for the price cut that you're suggesting. Since they already have something like a 20% market share globally, that's not going to happen - so your price cut would hurt more than it could help.
As for losing ecosystem support, there's absolutely no sign of that happening. Apple's ecosystem is where developers go to make money - and that's not likely to change.
In the end, please demonstrate why your knowledge of the phone market is greater than Apple's before shooting off your mouth.
And, boom goes the dynamite. I even ran some of the basic numbers and there is no way in the world it would ever have made sense to price it any differently. None. Even an 8 GB model at $100 less would have been disastrous to revenue.
Honestly will these little children with no critical thinking skills ever go away? They embarrass themselves to no end with their lack of knowledge, yet insistence upon barking a bunch of uninformed nonsense.
A $400 phone is no where close to the analogy of a $15,000 BMW.
$400 is still a lot of money. Remember most Android phones are $200 or less.
A plastic iPhone could have and should have been a profitable venture for Apple and could have been $400 no problem.
You are completely uninformed and lack any relevant knowledge to comment on the situation. Making such a statement as the bold disqualifies you from even the vaguest consideration of attention to future comments.
In other words, shut up.
Some of you hating the $550 price need a REALITY check. Apple is in the business to make money. Here is a quick calculation that shows what would happen if Apple priced the 5C at $400 vs $550.
Most insiders agree that Apple makes about 55-65% gross margins on the latest iPhone. For the calculation I'll use 57.5% gross profit for the 5S.
Example 1:
5S for $650, gross margin 57.5%, 65 mil units a year
5C for $550, gross margin 57.5%, 65 mil units a year
Total units sold: 130 mil
Total gross profit: 44,850,000,000
Example 2
5S for $650, gross margin 57.5%, 58.50 mil units a year
5C for $400, gross margin 39.5%, 145.50 mil units a year
Total units sold: 204 mil
Total gross profit: 44,853,000,000
I'm assuming that at $400 the 5C will canabalize 10% of 5S sales.
Apple would have to sell 74,000,000 more iPhones just to make as much profit!
Thats an increase of 57% more unit sales just to break even.
Lets say Apple only grows units by 25% with a cheap 5C. They would actually make over SIX BILLION less in gross profit.
I'm sorry but a $400 5C would hurt the company unless their unit sales exploded to almost 60%+
It would be stupid to take such a huge risk all at once. But i do see Apple selling C's at discounts in markets such as China/India once the intial sales fury ends
heres an excellent article that backs up my calculation:
http://www.valuewalk.com/2013/09/apple-inc-aapl-iphone-5c-positive/
Your post will be ignored by the wealth of trolls. I can't even call them trolls really, they are just whiny uninformed brats that have absolutely no idea what they're talking about. Your post is the truth.
Its just funny to me.
Apple knows WTF they're doing...
...the numbers corroborate it....
Yet Forum Whiners think they know better. Ok...throw us some numbers, forum whiners, and show us all how Apple is Doomed.
Nostradamus, is that you? Will you eat your words when the 5C becomes the #1 or #2 phone model? Or will you quantify your prediction by saying the 5C should sell 100 MM in 2013, anything less is a failure?
You obviously know no more than I do.
If Nokia's can sell high end plastic phones for $200-300. Apple could have made a profitable 5C for less than $550.
No one here knows the build cost for this phone. The manufacturing costs are obviously lower than the 5/5S and its internals are all old as well.
IMO with the little we do know the phone could have been profitable for less than $550.
And most sub $200 Android phones are shit. Plus the companies selling them don't make money on them.
Um didn't Nokia just got bought out by Microsoft? How's that strategy going for them.
We'll see what happens.
I think the 5C is a great device for the wrong price. In the US it'll probably do well because Americans are blinded by subsidized price models. Overseas though I'm not too sure.
To spin your question another way, if Apple offers a lower price 5C before next year would you eat your words?
If some point out that other products' prices dropped then this is a consequence of at least one of the factors mentioned above. If eg Macs or iPods are not Apple's main business anymore they can afford smaller profit more easily. Over time technologies in making and assembling parts becomes more cost efficient and you can bring down price without sacrificing profit.
Only lowering price in order to make it more affordable is not how it works. And should Apple indeed be off their targets they will act and lower the price or kill the product. The market will sort it out. However, once you've established a price point doing the opposite and going up is hard to do unless you have a monopoly. Overall, I'm curious but not worried. iPad eg was a much bigger risk from my POV.
I never said the price was right, bob barker, but I never said it was wrong either. Apple would know better than I would.
I mentioned $200 Nokias and Androids to add context, which a lot of people here are lacking.
$400 is NOT cheap for a phone as some here are now saying. Actually some of you were saying $400 was the right price before Tuesday because its high enough for Apple to make a profit but low enough to differentiate it from their premium offering.
We all can agree Apple will never make a cheap bargain phone. But a midtier phone? We all assumed that's what Apple would give us. I don't consider $550 midtier.