Apple's Tim Cook: iPhone 5c was never supposed to be entry-level

Apple's Tim Cook: iPhone 5c was never supposed to be entry-level

Summary: iPhone sales were up, but analysts and investors are still confused by the new turns the product category has taken.

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TOPICS: Mobility, Apple, iOS, iPhone, iPad
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Apple was quick to portray Q4 as a "record September quarter" thanks to stellar sales figures for the iPhone unit revealed after the bell on Monday

According to the Cupertino, Calif.-based company's fourth quarter earnings report, iPhone sales were up by approximately 26 percent annually to 33.8 million units. That figure was undoubtedly helped by the the unveiling of the new iPhones 5C and 5S last month.

Nevertheless, the iPhone category continues to confuse analysts and investors -- especially given the mixed welcome for the iPhone 5c.

CEO Tim Cook took point on this topic, acknowledging that he saw some media reports suggesting that the 5c was supposed to launch as the entry-level product for the brand.

The Apple chief asserted that this was “never our intent." Here's more:

If you look at what we’ve done with the iPhone line, we’re selling the iPhone 4s as an entry offer, 5c as mid-tier, and of course, the iPhone 5s. Our goal is to overall have growth for total iPhone. But also within that, we want to have each of those categories grow as compared to what we were doing previously. If you look at the total offers that we are making in the low-end space and mid-tier and high-end, the sum of all the price points we offer, we would like to grow in each one of those. And we are really pleased that we did that. And, so, that is how we measure -- partly measures success because the most important thing for us is to make a great product. But we do need growth and we are happy that we've seen that.

I realize that some people were reading rumors about that the entry phone would be the 5c, but that was never our intent. Our entry phone is the iPhone 4s. You know from comments I made previously, we are selling the iPhone 4 in very good [numbers]. As we begin to experiment in different regions at a somewhat lower price point, we saw a fair amount of price elasticity. So we are hoping and thinking that will continue for S.

Cook later reiterated that the iPhone 4s replaced the iPhone 4 as the free-with-contract iOS smartphone.

The iPhone 5c retails for $99 on contract in the United States followed by the 5s starting at $199.

Topics: Mobility, Apple, iOS, iPhone, iPad

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44 comments
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  • And unlike numerous tech authors

    Again Cook did not use the word "budget".
    1,2,3
    • Doesn't matter what he said...

      For years we heard about Cheap, Plastic, Android Phones and now they make a Plastic iPhone, what do you think people are going to think about this phone?

      Plus, 8 Gig iPhone 4s with a 30 Pin connector means that the phone requires an adapter to even be able to use any of the new accessories.

      This isn't a great model to try and capture emerging markets and I'm skeptical of the leadership presently sitting a One Infinite Loop.
      slickjim
      • He still didn't say it.

        "For years we heard about Cheap, Plastic, Android Phones and now they make a Plastic iPhone, what do you think people are going to think about this phone? "

        He still didn't say it =).
        CobraA1
      • Re: and now they make a Plastic iPhone

        On would think you did some research before making your claims?

        The iPhone 5c is still all-metal inside. In fact it is just a metal phone coated with color plastics. That preserves all the "metal case" qualities (the case is still used as antennas) and brings new qualities, such as color, no need for precise machining of the case (those CNC machines are needed to produce the many millions of iPhone 5S phones) and... some people just do not like all-metal phones. Those people do keep their iPhone 3GS precisely because of that --- the iPhone 5C finally lets them move to a new platform.

        So no, Apple did not make an plastic iPhone.

        As for the 30pin connector in the iPhone 4S -- there are plenty of accessories for this connector. These need to sell, right? If someone has the choice to get an free cheap Android phone on contract, why not get the much better iPhone 4S?
        danbi
        • danbi you really cheer me up sometimes

          This has got to be one of your greatest ever posts. I don't see a /s anywhere so can only presume you are serious!! Fantastic reading danbi.

          So it looks like plastic, smells like plastic, feels like plastic (well, it is plastic) but because it has an apple logo on and some metal inside, it's not plastic. There you go folks, the a new definition of metal from mad dog mcdanbi. Apple doesn't make plastic phones, they're lying to you, it's not plastic at all.

          Sometimes danbi, you are just too funny.
          Little Old Man
          • Here we go again...

            "You're perceiving it wrong"
            oxHanoverxo
          • LMAO

            Yes, sorry, my bad.
            Little Old Man
          • What's the big deal?

            Most phones, Samsung or Apple, end up in a plastic tomb anyway.

            I always thought that was a big irony with the iPhone: in Steve Jobs' day, they worked their butts off to make something physically beautiful. But it would be fragile enough that it would have to go into a 20$ lime green rubber case as soon as it was bought!
            Mac_PC_FenceSitter
          • Fully agree

            The vast majority of phones I see, regardless of brand, all live in a protective case. Some of the phones I've seen look positively hideous once in an otterbox or equivalent. Why people are so hung up on samsung plastic or apple alu I have no idea. Many of the complaints I hear about plastic fantastic phones are plain lies and that's ignoring the fact without doubt - there's a case for that. But then I appear different to many people, functionality wins out of finish for me. If it's comfortable, light and fits in my pocket, I couldn't care less if it's plastic or alu.
            Little Old Man
          • They have patent for that

            Hey they have a patent for making a metal that feels like plastic, smells like plastic, look like plastic and it is not a plastic.

            Now all companies need to pay royalties for using plastic in their phone design
            Albert Arul Prakash Rajendran
      • been to a store lately?

        30 pin accessories remain as common as ever. They probably still outstrip lightning accessories, in terms of variety and availability of product. This might be an issue someday, but I daresay it isn't one yet.
        Mac_PC_FenceSitter
      • For years, they made plastic iPhones.

        Remember the 3G and the 3GS? both were plastic on the backside, and are really what gave inspiration to the Galaxy phone designs.
        Champ_Kind
    • Because

      his "entry-level" 4S is prices at the same level as mid range phones running Android or WP.

      Over here it costs 400 Euros for an "entry-level" iPhone 4S with 8GB, whilst the competition start between 100 and 150 Euros - the Lumia 520 can be had for around 130 Euros from Amazon, for example.
      wright_is
      • well I assume we're talking about contract phones

        not unlocked. it's true that in Europe you probably wouldn't want a contract phone even if it was available
        onewarmslime
        • Can I ask why

          you say that? The vast majority of people here buy on contract. If you do the math, contract phones don't work out any more expensive than outright+talk/data package. If you're happy to keep your phone for 2 years that is.
          Little Old Man
          • Often

            because they take them with them from PAYG to PAYG SIM card without ever taking out a contract.

            Of the people I know, probably two thirds have bought their phones outright and don't have contracts, or have very small contracts - and usually the phone is used for 5 or 6 years before being replaced.
            wright_is
          • Clarification

            two thirds of the people I know with private phones, those with company phones tend to be on contract and always swapped out every 2 years.
            wright_is
        • Lumia 520 is $99 off contract

          The Lumia 520 is a very nice and affordable phone offered off contract in the US for $99. I am pretty sure the $130 Euro price nets you the same phone.
          pelleg
  • Why did he wait until after the earnings report to make that statement?

    I feel he waited to craft his explanation of what the iPhone 5c's purpose was around earnings reports and sales figures.

    Had it sold handedly in many a country, he could easily have said that "was always our intent."
    John Zern
    • Actually, that conjecture is a possibility.

      But Apple DID go on record indicating that they would never build a cheap phone.
      kenosha77a