Rumors are circulating that Apple is cutting orders for the iPhone 5c in the face of weak demand, and this in turn is fueling speculation that the handset might be a misstep by the Cupertino giant.
But if the iPhone 5c ends up being a flop, what's behind the failure?
First off, I think that it is far too early to call the iPhone 5c a flop. Even if Apple is cutting orders, this could be part of the normal scaling back that happens following a launch as Apple re-evaluates the supply chain and balances things out. This sort of thing is normal.
Apple likes there to be as short a gap as possible between stuff coming off the assembly line, and that stuff being sold, and strives to have around 4 to 6 weeks of channel inventory. Given that iPhone 5c handsets (of all colors) are shipping within 24 hours, while the higher-priced flagship iPhone 5s is on 2 to 3 week back order, it makes sense for Apple to concentrate more on the iPhone 5s.
Another point worth bearing in mind is that we are unlikely to ever find out the sales figures of the individual handset models as Apple only reports data on iPhone sales as a whole. So if iPhone 5c sales are poor, but this is offset by strong iPhone 5s sales (and there's data to suggest that the latter is outselling the former by a significant margin) then the overall effect on sales will be hard to notice. Pundits and analysts like to focus on iPhone sales figures, but revenue and margin data are more telling and as a rule are better indicators of the health of the product line.
Finally, it's worth pointing out that a lot of people who buy handsets are locked into contract and upgrade cycles, and this could mean a delayed or extended upgrade cycle that extends well beyond the initial release. This may be doubly so for the non-flagship handset where consumers might be unwilling to pay unlocked prices to get their hands on the phone and instead wait until they are eligible for a subsidized upgrade.
But, if despite all I've said above, the iPhone 5c is judged to be a flop, what could be the reason behind it being a flop? Here are five possible reasons why.
1) Old model in new clothes
While the iPhone 5c is undeniably a new handset, under the shiny polycarbonate shell it is essentially a rebadged iPhone 5. While it is unquestionably an upgrade for anyone running a non-retina display iPhone, for those already owning an iPhone 4s or iPhone 5, there's not much new beyond the color.
2) No sane color option
The iPhone 5c comes in white, pink, yellow, blue, and green, there's no subdued black/charcoal/space grey option. Given that a black (or a variant on black) has always seemed to be the most popular choice of finish, the fact that it is not on offer might be putting a damper on sales.
On top of that, the lack of a red option is particularly surprising, especially given Apple's desire to gain a foothold in the Chinese market (red is a color traditionally seen as symbolizing good fortune).
3) Stuck with one color
You can dress up the iPhone 5c is different colored silicone skins (at $29 a pop) or you can use third-party cases, but as to the actual color of your handset, you're stuck with it for the duration of ownership.
For the trendy or teens with short attention spans, this is a concept that might not float.
As an aside, the most popular color in the UK according to iPhoneStockChecker is pink, accounting for 46 percent of sales, followed by blue at 32 percent, and green at 12 percent. White is low down the list at 9 percent, and the yellow version seems to be the ugly duckling, only chosen by one out of every 100 buyers.
4) Price shock
Apple lists an unlocked 16GB iPhone 5c at $549, which is only $100 less than a 16GB iPhone 5s. You can pick up unlocked handsets for less than this, but that high official price – which got a lot of press attention at the iPhone unveiling – will have undoubtedly put some people off.
5) Second best
The popular perception is that iPhone buyers are swayed by style, and that owning the attest and greatest handset is a status symbol of sorts.
While there no denying that the iPhone 5c is a new handset, it isn't a flagship handset, and with so much attention focused on the iPhone 5s, does this make the iPhone 5c seems a lesser, inferior, second best purchase?
The bottom line
Apple CEO Tim Cook is on record as saying that the company doesn't fear cannibalization, and that extends as far as its own products cannibalizing one another. At the end of the day, whether consumers are buying the iPhone 5s or the iPhone 5c (or the older iPhone 4s), people are still buying an Apple product as opposed to the competition.
If the iPhone 5c is a viable product, then chances are that we'll see similar models coming down the pipe in the future, if not, then we may see Apple shift away from this approach. This is how businesses do business.
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