Monday, September 16, 2013

Why the analysts are wrong about the iPhone 5C

In the days since the iPhone 5C and 5S were unveiled, Apple analysts and pundits seemed to have fixated all their criticisms and energies on a single part of Apple's new smartphone strategy - PRICE.

But what about the other big question - UNITS?

Flash back to September 2012, and Apple was just about to unleash the iPhone 5 on the world - what would become Apple's fastest selling device in history - selling an astounding 2 million devices within hours and going on to sell a record 5 million devices on it's first weekend before inventories began to drying up. It would take them months before supply finally caught up to demand, but by then the peak holiday season was over, and the iPhone 5 launch hype had all but died down.

Back to the present, and here we are with the all new iPhone 5S. An even more complicated device than the previous generation, with it's new 64-bit A7 processor, M7 co-processor and Touch ID sensor. Available in an even wider variety of color and storage combinations than ever before. As insightful as Apple is into supply chain management, topping the iPhone 5 launch numbers and fending off the ever present competition this holiday season would have been an impossible task with the iPhone 5S alone.

And that's where the 5C comes in, soaking up all the launch hype and capitalizing on the Apple "Halo Effect". With the $549 entry level 5C, at 15% cheaper than the entry level 5S, Apple is likely aiming to satisfy as much pent up demand as possible, targeting users from other platforms who just want in on iOS 7, and owners of the iPhone 4S or older, for which the 5C is significant leap forward in terms of hardware (better speed, camera, screen, and battery life, not to mention a whole range of impulse purchase inducing colors).

Which would also explain why the iPhone 5S wont be available for pre-order at all this year. After all, what would be the point if they were going to sell out of devices within hours anyway?