Apple launches iPhone 5C: Color, costs aimed at emerging markets

Apple launches iPhone 5C: Color, costs aimed at emerging markets

Summary: The iPhone 5C, one of two iPhone 5 replacements, gives Apple a high-low strategy on pricing. A 16GB version is $99 with two-year contract.

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TOPICS: Mobility, Apple, iPhone, China
35

Apple took the wraps off of the iPhone 5C, a lower cost device targeted at the emerging markets. The addition gives Apple a device designed to take emerging markets momentum away from Android.

The iPhone 5C, one of two iPhone 5 replacements, gives Apple a high-low strategy on pricing. As a result, a low-cost iPhone, which had been rumored and telegraphed, is likely to give Apple more volume. Profit margins may be crimped a bit, but Apple executives said they can segment the market later.

color iphone1

 

Speaking at Apple's launch event, marketing chief Phil Schiller said via CNET's live blog:

"The iPhone 5C is made with all the incredible technology that customers have loved with the iPhone 5, but there's more, too. It has an incredible new design. One that's more fun, and more colorful than anything we've made before."

Among the key points:

  • Devices come in green, grey, light blue, peach and yellow.
  • iOS 7 wallpaper matches the phone color.
  • Custom covers and cases.
  • Backing is polycarbonate.
  • A steel structure that serves as a antenna.
  • A6 chip.
  • 4-inch display like iPhone 5.
  • 8MP camera and retina display.
  • It goes for 16GB priced at $99 with contract and 32GB at $199. Apple made cases go for $29.
color iphone2

 

Apple spent a lot of time talking about the construction and options on the phone. Simply put, the iPhone 5C may be a Moto X killer. The larger question is whether the iPhone 5C is low-cost enough to target new markets---either U.S. customers who want phones cheaper than $199 on contract or people in China or India.

Schiller said it was the "most forward thinking phone anyone's ever made." Apple's aim was to create something that was solid and rigid yet plastic. Apple is taking preorders Sept. 13 for Sept. 20 sales. 

What's unclear is whether consumers will view the iPhone 5C as cheap or classy. Given the new iPhone 5S colors---space grey, gold and silver---it'll be clear who scrimped on a phone with a two-year contract.

But don't discount the iPhone 5C. Strategically, the device is more important than its higher-end sibling.

Barclays analyst Ben Reitzes said in a research note:

The 5C should help Apple prevent share loss and even regain share vs. Android phones.

That market share tipping point could come should Apple land a deal with China Mobile to offer one or both phones. China Mobile has 700 million subscribers.

applechina

 

China Mobile sells more smartphones than Verizon, AT&T and Sprint combined, according to Stifel Nicolaus analyst Aaron Rakers. He said:

With competition heating up, Apple has fallen to 7th position in smartphone market share in China in C2Q13 according to Gartner. While Apple’s brand image in China remains very strong a number of domestic smartphone manufacturers offering suitable products at compelling price points has resulted in Apple’s fallen share. We believe an iPhone 5C would integrate multimode capabilities that support China Mobile’s network
and be priced at level more palatable for China Mobile than current Apple iPhone products. As a result, we believe an announcement of iPhone acceptance at China Mobile may be coming soon – perhaps as soon as September 11 in conjunction with Apple’s separate event that it will hold in China. As we have written in the past, Apple would likely regain lost market share and realize between $4 - $8 EPS over trailing 12-months post launch.

 

Topics: Mobility, Apple, iPhone, China

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35 comments
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  • Aimed at emerging markets

    Does that mean only available in emerging markets?
    greywolf7
    • I want…

      I sure hope not! I really like that!
      JohnFrank88
    • Pre-order starts on the 13th

      in the US domestic market. I'm sure it's the same case with most of Europe.
      Champ_Kind
  • Nice...

    ...a low cost phone that costs as much as a flagship phone on contract.
    jumbledmess
    • You noticed that too?

      So much for a low cost iphone. $199 with a 2 year contract? Emerging markets don't have many contract options... I can't see this doing better than phones that cost $100 with NO contract.
      kstap
      • I can see it

        And it will do well.
        This is not a low cost phone, maybe a mid cost.
        AleMartin
      • The base model is $99. Still not cheap.

        But not $199. iPhone 4S is free with contract. There's your cheap phone.
        baggins_z
        • 8GB with iOS

          is worthless. There's not enough storage, and we all know that iPhone can't have expanded storage.

          16 is good enough for the average user, 32 is more realistic for power users that like large games on top of music, photos, and apps.
          Champ_Kind
      • iPhone 5C, $549 off contract

        Not low cost at all.
        Emacho
        • Exactly!!!

          The target markets for this supposedly "low cost" phone are mostly non-contract countries, e.g., India, so people will have to pay full price, which is ridiculously expensive. Here's a perspective: In India, $549 can buy you a cheap motorcycle or scooter!!!!!
          jaykayess
        • Finally, Apple finds a way to make some profit /s

          So basically, they wanted to raise their margins on their year-old phones by taking the metal out and replacing it with plastic.

          So much for trying to compete with Android around the world.
          wanorris
        • Maybe they are planning a write down in 9 months

          I don't see cost minded people buying this. Apple must have lost its mind.
          greywolf7
    • Well, it is "incredible"...

      "more fun and more colorful". Not sure about the "anything we've made before" statement though.
      wizard57m-cnet
  • Pastel?

    Does Apple think pastel colors are back in fashion? Looks dull compared to Nokia bright colors.
    Sean Foley
    • Agreed

      Yeah, the colors are pretty Easter-like -- there are some pastels I like, but these shades don't really do it for me. The Moto X has some shades that are toned down compared to the Nokia, but they mostly seem more subtle and grown up. I wouldn't want to live with most of these 5c colors for the length of a 2-year contract.
      wanorris
  • Apple apologists - UNITE!

    I'm surprised our Apple faithful haven't commented on this yet. So, to get the party started, let's revisit some of the negative commentary that they have applied to Android over the years that now applies to iPhone:

    1. "Only poor people buy Android" - Guess poor people buy iPhone now too.

    2. "Android phone quality is poor because they use 'cheap plastic'" - I'm sure this will be spun to Apple using "high quality cheap plastic" now that the iPhone is made of it.

    3. "iPhone is a premium device with Android in a race to the bottom" - Let's look at this: A brand new iPhone running $99 on contract.... Hmmm. Isn't that what qualified Android phone as a "race to the bottom" even tho there were/are many successful high-end Android devices from manufacturers other than and including Samsung?

    4. "The only Android manufacturer making money off Android is Samsung" - Looks like Apple won't be making any money of iPhone C either.

    I EAGERLY look forward to OwllllNet and company's furious, angry, ill-informed "refutes" to these claims (even tho they were pulled from their own comments on ZDNet).

    In the meantime, enjoy the introduction of the iPhone 5C: http://www.youtube.com/watch?v=1sIWez9HAbA&list=FLjRYTNZJOyb9ISu3U-HWRpQ
    tallbruva
    • Not the first time Apple used Polycarbonate on the phones...

      Remember the original, the 3G, and the 3GS? They all had plastic backs that were more easily scratched than their front side or the back glass of the 4/4S, and people loved those phones.

      Apple will probably make more money off of the 5C than they would off a continued 5 model, considering the backside and antenna arrays being made out of less expensive (and easier to manufacture with) materials. However, it won't be as much of a profit margin versus the 5s, or last year's 4s model, or the previous year's 4 model.
      Champ_Kind
      • Exactly

        Apple apologists forget that it at one time was made out of plastic. Still doesn't change the fact that Android phones - Samsung in particular - were cheap phones because they were made of plastic.
        tallbruva
  • Two predictions.

    One, people will diss it like crazy.
    Two, it will sell really well and make Apple lots of money.
    baggins_z
  • Apple do it again!

    So the new features are already sounding great. I both love and hate the new affordability having only just bought my iPhone 5!! For me the fingerprint scanner is a real plus. Its competitors just can't keep up. You've only to see the 5C compared with the Galaxy S4. There's no competition!
    andypowell1089