Apple slams brakes on orders of (not so cheap) plasticky iPhone 5C Apple has told its hardware makers to reduce iPhone 5C production for the fourth quarter – sparking concerns that demand for the handsets may be weaker than expected. The 5C went on sale in September along with the high-end 5S, with both models hitting 11 markets – including the US and China – at once, for the first time. The …
This is where everybody seems to think of it as a tech item. To most iPhone buyers it isn't.
It is as much about technology as a Rolex watch. The watch is a nice piece of engineering, but it doesn't keep the time better than a £ 7.99 plastic one from the ASDA budget basket. If you now case a Rolex in plastic, would anyone think that it'd sell? I don't think so. It's a 'Veblen Good'.
So, my strategy (if I was responsible for Apple's sales) would be to go the other way: make it more expensive!
The next iteration of iPhones would have an iPhone 6S and an iPhone 6E. The 6S could house a new processor, a new camera, more RAM, better display and sell for £700 unsubsidised. The 6E (xclusive) would be a repackaged 5S in a Titanium alloy shell, would come with an exclusively shaped, J.Ive- autographed charger and a lambskin sleeve designed by Vivienne Westwood. It would have an extra 'Assistant' button that, if you press it, connects you to an actual Apple Genius who solves your problem (charged for through your phone bill). It would cost £ 1200.
And sell.
This kind of "Premium" phone already exists: it's called the "Vertu". Base model (hand-stitched leather back, casing made of surgical steel) starts at €4.900,- and the Premium model (real sapphire glass, solid gold case, touches made of actual gemstones, Personal Assistant worldwide...) can climb the price range to a whopping €13.000,-. On the technical side, however, it's a total letdown...
I'm totally aware of the formerly Nokia-based Vertu. And I must admit that I stole the 'assistant-button' idea from said vendor . . .
Nevertheless, the Vertu is too expensive for the mass market. It's price is above the just-tolerable-if-I-drop-the-next-2-rent-payments line and will therefore be a real luxury item for really rich people and not for the wannabes that we all love to rip off.
Sorry Claire, I usually reserve this icon for you, but it's been quiet lately.
That isn't really true. iOS7 isn't any more of a copy of Android than a Tonka Truck is of the real thing. iOS7 is little more than a app drawer with a wonkey, vertigo inducing background and a snazzy media player that appears on the lock screen. ITo be a copy of Andoid it would still need to add:
- widgets or other methods of adding live information for instant display
- customisation ability beyond changing the wall paper and ringtone and sorting apps into folders.
- ability to integrate third party apps such as launchers, browsers or keyboards that override the stock ones.
- ability to sideload apps (even if that introduces a massive potential risk of malware)
- the ability to browse the file system and save files from any source or program without having to rely on bouncing back and forth through cloud servers and providers.
- google Now = Siri done right
- real multitasking including the ability to have two app windows open at the same time (thanks for that Samsung)
Jailbreaking iOS does get some of these features right, but that isn't really the answer
Let me know when they actually implement some of these features and then it might be worth taking seriously.
Android? IOS7? What's that good for? Is it a kind of part of this trinket? Does it need to be there? I shall ask my butler to instruct the head mechanic to send someone to enquire about this . . .
Do you know how many turns the mainspring of an Omega Constellation has? How many teeth are on the date wheel of a Rolex Oyster Perpetual?
Who cares? It's a thing that people take care of for me if I pay for a luxury item. I trust that it will be of suitable quality.
That's how it goes, Bob.
@andreas koch
Oh how useful selective amnesia can be when you choose to use it. With all this focus on the details of the number of cogs in your posh watch etc, it's almost too easy to forget wer'e dealing with the assholes who claimed to have invented the rounded corner, the sliding bolt (of the kind used in the Pyramids) and more recently the revolving door.
@Spasch: "It's way too expensive compared to the plastic decked out competition."
"A mere two weeks after the iPhone 5C launched nationwide, Best Buy is offering the device for only $50 today"
http://www.theverge.com/2013/10/3/4800318/best-buy-puts-iphone-5c-on-sale-just-two-weeks-after-launch
WOT - a newer fone outselling an older model of another brand - that's out-FSCKING-rageous!!!!!!!!!!!!!!!!!!!!!!!!!!!
STOP.PRESS: SAMSUNG S4 Outlsells iPhone 4!!!!
STOP.PRESS: SUMSUNG S5 to outsell iPhone 5,
and yes (just so you don't think i'm biased) -
iSloan 6, may well just outsell S5 (for a few days/weeks ;)
@EvilPixieMan Actually the iPhone 5 (older than the S4) also outsold the S4 over an equivalent period of availability, and I should hope the S5 will outsell the iPhone5, but if past performance is a guide, it won't be outselling the 5S. Fortunately for Samsung, though past performance may be a guide, it's applicability is not set in stone. However I think the problem Samsung have is that the S4 along with the good stuff, had some wayward features they threw in to see if they would stick. It's a different philosophy to Apple. But the iPhone 5S has been a solid iterative upgrade with some really useful tech. Samsung should avoid building wayward features on wayward features and should focus on the elements of the feature set that is working best. I'm not convinced however that they have anything groundbreaking planned for the S5. It will be difficult (though not impossible) to match the speed and accuracy of the finger print scanner of the iPhone 5s (Apple purchase Authentec because they were ahead for compact no need to swipe scanner tech). They won't be able to go 64 bit with this next iteration (which, despite initial skepticism, has now been proven to provide a tangible performance boost) because Android won't support it. They will probably be able to match the motion chip and will be able to create a competing low-power bluetooth competitor to Apple's forthcoming iBeacon tech. They will of course improve the camera and can maybe do something really earth shattering there. However I suspect they will just up pixel count and aim to do slower slow mo than 120fps gives. They can prove me wrong of course, by doing something totally new. We shall see.
It's probably the same price they would have dropped the '5' to when the '5s' was released. Apple keep 1-2 older handsets as cheaper options and the 5c is basically just a 5 in a plastic casing. So the pricing seems about what you would expect if you view it as a 5. It will also appeal to some additional markets and for Apple it's clever - people who want the aluminium case will pay a bit more for a 5s (where they may have bought a 5) and people who want more colour now have a choice.
As I understand it, the iPhone 5S has faster graphics than anything else on the market, and a fast CPU (though I doubt being 64 bit has anything to do with it...more likely to be something like better memory bandwidth). The small display allows it to have tolerable battery life with a small body. It is indeed a very advanced product.
The competition has a number of additional features which are useful to some people but not all. Obviously a large number of people don't find them useful. Adding two large seats in the back, a towbar and a rack of Hella lights on the roof would not in fact "upspec" a Porsche 911.
I don't have an iPhone because it doesn't meet my needs, but I don't feel the need to be sarcastic about it.
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BWHAHAHAHAAA - its a Porsche now?
Kind of pathetic the excuses and comparisons Apple users try to make to placate their egos... with their absence of utility. But lets take that analogy - lets pretend its a Porsche. But its one that you can drive anywhere and they promise in 1 or 2 years they'll build a track you can drive it on. But by that time, it will be a Porsche from the 1960s and outdated with technology that's newer, better, and usable. But hey, you can always claim it as a collectors item... ?!?
the iphone 5S has one of the most benchmark optimised processors on the market, but it is still outperformed by a significant margin in some benchmarks that test the whole system by processors like the Snapdragon 800. 3D Mark in particular is a good example. Here the Snapdragon has about a 30-50% margin over the A7.
You all should tone it down a few notches. Until a few weeks ago, the 32GB iPhone 5 was $299, which I could not really afford. Now I can get a 32GB iPhone 5c for $199. Anodized brushed aluminum back or metal lined plastic back? Who cares! They are still better built than the all poly-carbonate (including the screen) phones that some favor. I don't need the fastest, most feature laden phone on the planet but I do need a bit more storage and I appreciate a well built device.
Bottom line is that $100 does make a difference to some of us.
I'm wondering whether the actual communication went more like:
"We know all your factories are flat out coping with demand right now so in order to increase production of our flagship model would you please reduce production of our other models?"
Seems like good business sense to me?
You know who else doesn't have an answer for emerging markets? Pet food manufacturers. Just like having pets (not working animals) is a luxury, so is a smartphone.
The term 'emerging markets' is product specific, it does not mean that markets for everything are developing in that place or that a given market ever will develop there for that product.
Upgrade time from my 4s. I've invested in various apps so don't want to change OS.
I have two main requirements however.
4G connectivity and a larger screen. The screen on the 5 is just not big enough (but the Galaxy 4 is just too big).
I do like the look of the 5S, but don't want to pay for all the new stuff that I don't need.
I've thought about getting a SIM only deal and a second hand/referb 5 and selling the 4S, but contracts on a new 5c come out at the same price.
I get the feeling they have deliberately gone for kiddie/girlie colours on the 5C to ensure people not into those colours go for the 5S.
What's the financial value of the apps you've invested in?
You can now get a really nice Android (Nexus 4) or Windows Phone (Nokia 820) for £200-£250. That price difference buys quite a few replacement apps. Although there's a greater likelihood that the apps you want are on Android - but I've heard the Windows Marketplace is much improved.
I think Apple are now over-priced. They weren't that much before, as the top-end phones were a lot better than the budget end, and I thought the iPads were by far the best tablets until about a year ago (and so worth the premium). But the competition has hotted up, and you can often get very good budget models. Also, unlike Apple, last year's top end is now down to £200-£300. My phone is currently what work gives me, my next tablet is unlikely to be an iPad. I've probably only spent around £50 on apps, and can get an equally good tablet for £200 less than the 64GB iPad I had to get, as there's no memory card slot.
It then comes down to OS preference. In a phone, I like simplicity and would go back to Windows. In a tablet, I rather fancy the Samsung Galaxy Note 10.
No. The iPhone 5 is done. But you can still get 4s as the low-price entry (typically free on contract).
The iPhone 5c is virtually identical, spec-wise, to iPhone 5. What Apple did was take the same innards and use a plastic case that's less expensive to make. .
Phil O'Sophical: exactly.
Apple need to decide if they *need* to have midrange and even budget products and then actually build them. A real one not just slap a sale sticker on lasts years spec and put it in a cheaper casing.
I think we can assume Apple don't *want* to do budget or midrange though and I'm nearly as convinced they'd just cannibalise more of their own high end sales than they gained in new customers.
If Jobs was still around they wouldn't be pandering to the markets or stockholders like this. Perhaps Jobs would have been tempted to build something so cheap it destroyed everyone else's market, his MAD moment against Android but the half assed 5C would never exist.
"Yeah, I don't think Apple want a slice of the budget market really. OK they have the Mac Mini and the iPod nano but both seem like nobody at Apple really cares about them.
You don't see Rolex selling a £50 watch or Ferrari a £30k car, premium brands retain their value by being premium."
Stop fooling yourself mate!
No one else (other than those of the same ilk) agrees that Apple is a premiun brand. If it were so premium why have all the pikeys and chavs got one? FFS they hired someone from burbery! CHAV CHAV CHAV spray painted all over it!
Not an Apple fan but I agree. I think they produced the 5c to pander to the stock analysts who think they should be competing on the bottom end. This was never Apples vision. I don't think they need to compete on market share since they seem to be making gobs of money selling the Apple experience. Producing an Iphone to meet android bottom fisher specs would only dilute the brand they worked so hard to compete and would also probably be a crappy phone.
As a rule of thumb, anytime analysts agree that something should be done, it means that it absolutely, under no circumstances should be done.
Analysts are the worst. They know nothing about how any given industry actually functions. If they knew what they were talking about they'd be able to make a lot more money by participating in the industry, instead of pontificating on it.
Analysts are an extension of brand marketing strategies and nothing more. Anything they say should be treated with the same amount of skeptisim you apply to any marketing efforts. Basically ignore it all and make decisions on your own and/or weight them with opinions of others whom you trust. You'd have equally good luck asking a random hobo to assess an industry plus you wouldn't have to dress up or be mindful of your language for the privilege.
You do understand this article is addressing future manufacturing capacity right? Maybe you don't.
When you manufacture anything at scale you forecast your future supply chain capacity requirements based on present product velocity. The issuance of near term guidance with a decrease in anticipated 5C unit production means that, based on present demand, Apple overestimated the product's popularity and does not see the potential for increased rates of adoption going forward. Therefore they are scaling back output of the 5C and increasing production of the 5S because they are seeing increasing demand for it. That's how manufacturing works...
Apple doesn't need a budget phone, unless it's actually much cheaper.
In the US, buying the flagship iPhone will cost you about $3K over the life of the contract. Buying the cheap version will cost $2.9K. Producing a real budget model drops that cost down to perhaps $2.5K.
People aren't quite that rational. Up-front cost weighs more heavily than long-term obligations. But over time they are much more rational than marketing people seem to believe.
I know there has been lots of rumors about order cuts and so forth and so let me just take a moment to make a comment on these. I don't want to comment on any particular rumor because I would spend my life doing that but I would suggest it's good to question the accuracy of any kind of rumor about build plans and also stress that even if a particular data point were factual it would be impossible to accurately interpret the data point as to what it meant for our overall business because the supply chain is very complex and we obviously have multiple sources for things, yields might vary, supply performance can vary. The beginning inventory positions can vary, I mean there is just an inordinate long list of things that would make any single data point not a great proxy for what's going on.
The 5C was a desperate move for money and the last straw for apple, apple is dead and ive been telling you stupids for awhile now but you just don't listen, Samsung & LG took over already jump on the band wagon before your apple junk is worth 0.00 lol. Fk all you who want to reply and debate me. hihihihihi. I win!
First, it needed one or two features better than the preceding 5, such as the same improved camera as the 5s, without the 64-bit processor and fingerprint reader. Instead everybody sees it as "last year's model in a cheap plastic case," because that's exactly what it is.
Second, why the femme colors -- other than possibly the white, there are no colors I would remotely consider. The 5s colors are all gender neutral, but 5c looks totally aimed at women and kids. So there went 50% of their potential buyers.
They need to price 5C half of the price of a 5S, max, for it to sell ... I think they thought they wanted to hike up the price of the 5S and wanted a phone that would match the price-point of the previous high-end models ... Good news for Apple, ppl are buying the more expensive model - exactly what they want ... Now that is good business sense ... squeeze those dollars out of us.
Thing is, the business tactic worked better than anticipated, so now they have to shift manufacturing capability from 5C to 5S - better situation than expected.
I am not surprised that this has happened. Thin about it, most people go out to buy their phones with a contract. I have met very little people who actually bought the phone outright. So even though iphone 5c was cheaper by $100, it didnt give the incentive for people to buy it because they would still be stuck in 2 year contracts. I would rather pay small amounts monthly and get an iphone 5s rather a iphone 5c. Now if on the other hand, the 5c was selling for $100, I would buy it in a heartbeat but that isnt going to happen.
See you later iphone 5c
After all, it is a wonderful display of a string of utter douchebags answering their brightly coloured plastic phones in a loud and obnoxious manner. It doesn't sell it to me, but maybe I'm not the target market. The problem, it seems, rather pleasingly, is that the target market of total fuckwits is much smaller than Apple anticipated.
I have been reading through the comments... and I have to say that so many of you are completely misguided.
Concerning price: I have seen a number of people mention price. But you have to look at the underlying dynamics that make up the price. A number of phones are literally being given away. There is a reason why Samsung and Apple are the only ones making recognisable profits in the Smartphone market. Just like in the PC market, too many companies have fallen victim to the price wars mentality.
Consider this: If Phone-A is sold at a 5% profit while Phone-B is sold at a 35% profit, is it safe to say that Phone-B is over priced and should be priced as Phone-A? I contend that its unsafe to expect that all companies should sell their products at razor margins. This is not necessarily good for the economy and not good for the company.
While I want a good deal for the amount of money I put down, I also want the company who I purchase into to be around for the long haul. A company who does not maintain a certain level of net profit will not survive.
Now in direct relations to this story, there are a number of considerations to take in.
If the iPhone 5S is selling better then expected, while the iPhone 5C is selling better then the leading competitor then how is that a failure?
But the most important point that can be brought up is that this article is based upon speculation and rumours that have been proven to be insanely inaccurate historically.
Regarding theverge's report.. BB is not selling 5cs for $50, it's incorrect in two aspects:
1) It's not $50, it's $100 then you get a $50 gift card... which must be spent on other tat at Best Buy.
2) ***2 YEAR CONTRACT***!!!
Phone companies will give away almost any phone to get you hooked into one of those contracts. AT&T and VZW (the big 2) have hideously expensive data plans, which is mandatory (you cannot elect to use wifi only and go with low or no data with any smartphone or iphone.) The 5c *started* at $99 with 2 year contract.
You are probably unaware of the situation here in the US, but these mandatory data plans start at $60 a month on AT&T (450 minutes, NO TEXTS, and.. I wish I were joking... 300MB data. or 3GB data for $70 total instead.) Add texts and you are at $90 already. VZW's new plans are even worse, unlimited text, talk (no option for less!) and 2GB is $100. You want a better price? Sprint's somewhat better, T-Mobile is WAY better, but T-mo at least no longer subsidizes your phone.. .although you can elect to pay one off over time instead of pay up front.
AT&T and VZW REALLY want people on these, so you can get all sorts of Android phones free (*with 2 year contract) and IPhone 5s is under $199 (*on 2 year contract.)
Ouch! Thanks for that. I knew US tariffs were higher than in Blighty, didn't realise it was that bad.
In comparison £34 (ex VAT) per month gets you a 2 year contract, new iPhone or Galaxy 4 for nothing up-front, 1 GB 4G data and unlimited calls and texts. And that's dropping slightly as all the players are now doing 4G.
I believe 3 will give you unlimited calls, texts and bandwidth, including tethering and top-end phone for £35 per month including VAT. And when they go 4G in a month's time, they upgrade all their users for free. You can get 1/2 GB of data, some calls, many texts and a cheap phone for £15 per month (inc VAT) with them.
Do you pay sales tax on the contracts, or only the phone itself?
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