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

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


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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.