Tim Cook Has Faith In The iPhone 5C
At the end of October, Apple announced its earnings for the fiscal fourth quarter of the year. During the conference with investors, Tim Cook was asked by Bill Shope of Goldman Sachs how the iPhone 5C is doing and how will the company market the iPhone 5C in the “cost sensitive regions” of the smartphone market.
Tim Cook’s response was “If you look at what we’ve done, we’re selling the iPhone 4s as our entry offer [...] We sell the iPhone 5c as the mid-tier and the 5s. Our goal is to have growth across the iPhone but we want each of those categories to grow as compared to what we were doing previously. If you look at the total that we’re making in the low end and mid-tier and high end, the sum there, we’d like to grow in each one of those. We’re really pleased that we did that”.
While Apple aims for success with all of its product lines, the iPhone 5C seems to be a lot less popular than its high end brother, at least that is what sales suggest. Localytics suggests the iPhone 5C was about 3.4 time less popular than the iPhone 5S in the first week of release in the United States. Consumer Intelligence Research Partners also said the iPhone 5S outsold the iPhone 5C by more than two to one, claiming the high end iPhone 5S accounts for 64% of the total sales of the new iPhones, while the iPhone 5C accounts for only 27%.
The reason behind the big difference in popularity between the two new iPhone models could be related to consumers’ expectations for both the iPhone 5S and the iPhone 5C. The rumors about the iPhone 5S and iPhone 5C were spot on so both models’ specs weren’t a surprise; however, iPhone 5C’s price was a surprise as many consumers (and even analysts and investors) expected the plastic iPhone 5C to be priced cheaper. Instead of being offered with an unsubsidized price tag of $350 or $400, the iPhone 5C is sold for $549 off contract, or the equivalent of $735 in China (a huge price for an emergent market such as China). This was a surprise, as most analysts believed that one of the main reasons for iPhone 5C’s existence is that Apple would want a cheaper iPhone for the Chinese market.
However, Tim Cook claimed (again) that the iPhone 5C was never made with the intention of being a low budget iPhone, even though the public perceived it as such. Cook basically suggests it was a problem of public perception based on rumors. He also added that the iPhone 4S was intended to take iPhone 4′s place in Apple’s current lineup.
This is what Apple CEO Tim Cook had to say: “What we did with our lineup this time was the 4s is replacing the 4 [...] If you look at the US as an example, the 4s is now free. The 4 was free previously. When you translate that out of the US, it depends on the market as to what specifically happens. Currency changes and the strength of the dollar doesn’t always play in our favor in some goes. We see the 4s as our entry iPhone offer that gives somebody the ability to access the entire ecosystem as a fantastic product. We understand that there is elasticity in that market and it will move accordingly. [...] I realize that some people were reading rumors about that the entry phone would be the 5c, but that was never our intent obviously. Our entry iPhone is the iPhone 4s and as you know from comments that I’ve made previously we were selling the iPhone 4 in very good volumes and as we began to experiment in different regions at somewhat lower price points we saw a fair amount of price elasticity and so we’re hoping and thinking that, that will continue with the 4s”.
Tim Cook defends the iPhone 5C for two reasons; one is that the iPhone 5C is actually a good incentive for customers to pay another hundred bucks and get the high end iPhone 5S; the other reason is that those that don’t want to pay the extra hundred dollars but still want an iPhone, will eventually buy the iPhone 5C and Apple gets profit from every iPhone 5C unit sold. It is worth mentioning that the iPhone 5C will become the low tier iPhone next year. The problem is that instead of being free next year, many customers, analyst sand investors would have preferred the iPhone 5C to be free this year; if that were the case, the iPhone 5C’s future wouldn’t be so grim. As it is now however, the iPhone 5C is in a pretty bad spot – it is definitely not good enough for customers expecting a high end smartphone, but it is also too expensive for customers expecting a low budget iPhone. As we said, things will change next year when the colorful iPhone 5C will become the low tier iPhone, being free. Tim Cook however doesn’t seem too concerned about iPhone 5C’s future, as Apple has long terms plans for the recently released smartphone.
Both the high end iPhone 5S and the colorful iPhone 5C were initially released almost two months ago on September 20th; since then Apple launched both iPhone models in 35 countries at the end of October and in another 16 countries on November 1st.
About the iPhone 5C
The iPhone 5C is very similar to last the iPhone 5. Both iPhone models share similar specs and features, but there are also differences between them. For one, instead of the aluminum body of the iPhone 5, the iPhone 5C comes with a reinforced polycarbonate body and five color variants (blue, green, yellow, pink and white) instead of the iPhone 5′s two color variants: black and white.
As mentioned, both iPhone models also share similar specs. Both the iPhone 5 and the iPhone 5C are powered by the same A6 System on Chip, both are equipped with the same 4 inch Retina display and the same 8 MP camera sensor (with 2.4 aperture and single LED flash). The iPhone 5C comes with Apple’s latest mobile OS, iOS 7, out of the box. As for improvements over the iPhone 5, the iPhone 5C has a better front facing FaceTime camera, an improved battery life and it supports 13 LTE bands, more than other smartphones (except the high end iPhone 5s).
About The iPhone 5S
The iPhone 5S is Apple’s current flagship. It comes with the same 4 inch Retina display as the iPhone 5C and the iPhone 5 and it has chamfered diamond cut edges. The iPhone 5S features vastly improved specs over the iPhone 5. The iPhone 5S is powered by the new 64 bit A7 System on Chip, that offers up to 40 times CPU performance increase and up to 56 times GPU performance increase. The A7 SoC also comes with support for OpenGL ES version 3.0 that allows developers to make games with very detailed graphics.
Besides the first ever 64 bit System on Chip, the iPhone 5S also includes the M7 motion co processor; the M7 chip is a dedicated CPU that processes motion data from the accelerometer and gyroscopes, leaving the main CPU to handle other tasks. The M7 motion co processor will be very important for Apple’s upcoming smart watch, the iWatch. Until then, the M7 motion co processor (that includes an accelerometer, gyroscope and compass) will be used by the next generation of health and fitness apps to measure motion data.
The iPhone 5S also benefits from an improved battery life thanks to a bigger, 1570 mAh battery. It also features an better camera sensor that offers many new features such as dual flashes, a larger aperture (f/2.2) and larger sized pixels that drastically improves image and video quality. The dual LED flash is very important for those times when taking a picture in low light conditions and the larger aperture will help control how much light each picture gets. The new camera sensor also allows you to record slow motion videos, in case you want to make your videos more dramatic.
The iPhone 5S also includes a fingerprint sensor called Touch ID that allows you to authenticate just by pressing the Home button and make iTunes purchases. The fingerprint sensor is only 170 microns thin and it can detect 550 pixels per inch while scanning sub epidermal skin layers. Touch ID feature 360 degree readability so you won’t have to worry about holding your thumb in a certain orientation in order for it to be scanned correctly by the fingerprint sensor. The sensor also includes a tactile switch, a stainless steel detection ring and also a laser cut sapphire crystal, that protects the sensor from scratches. The Touch ID system can also store multiple fingerprints, allowing you to share access to your iPhone 5S to a few family members or friends.
