Tim Cook admits iPhone 5c share lower than expected, says demand was 'different than we thought'
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."
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.
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.
Comments
It shouldn’t have been marketed as anything other than what it was: last year’s phone.
That's 'caus it's too expensive... why buy the 5C when you can pay a little more to get the 5S?
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).
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.
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.
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.
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.
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...
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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.
You do realise no phone is actually free?
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.
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.
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.
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).
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.