Apple is making billions of dollars every quarter while selling millions of iOS devices, and yet “analysts” always seem to find doom and gloom, and run with it. The latest report points to Apple cutting orders of the iPhone 5C by half, and many are pointing to this indicating that the 5C is a flop. That notion couldn’t be further from the truth, and that’s mainly because the iPhone 5C isn’t the long rumored cheap iPhone, and instead just their new mid-tier offering. The idea of the iPhone 5C failing is based on the idea that Apple intended to sell the device as their entry level model to feature phone owners, and developing countries. It is a fail by those standards, but Apple designed the iPhone 5C to replace the iPhone 5 at the mid-tier level, while costing less to produce.
Early sales estimates are pointing to a majority of iPhone sales coming from the new top tier 5S line. That is what Apple wants to see, because there’s the greatest profit margin on the 5S as it sells for the highest price. Apple wants to push as many customers as possible to their latest device, and they look to be doing so. The first weekend of iPhone sales netted nine million, and it has been reported that the 5S is outselling the 5C three to one. Since then, the numbers indicate a trend to drop to 2 to 1 over the next few months, but that’s definitely better than the reverse. The iPhone 5C seems to be getting more customers interested in new iPhones, and Apple appears to be up-selling to the latest, and greatest iPhone. The 5C could be getting more people in the doors, but the 5S is what they’re leaving with.
Introducing the 5C was a brilliant move by Apple as now they can claim they’re selling two new iPhones, rather than just dropping the price of the previous generation. They continue to sell iPhones in the millions, another 33.8 million last quarter, and now they’re selling more of their premium devices. The 5C isn’t even Apple’s cheapest iPhone, and the extra $100 for the 64-bit A7 chip, improved camera, and TouchID fingerprint sensor has been the most popular choice thus far. When Apple set out to create the iPhone 5C, their goal was to increase their profit margins, and the 5C does this at two levels. First, any 5C units sold have a higher margin than the iPhone 5 in the same position, and second, more people are choosing the 5S over the 5C, with the 5S having a higher margin. The iPhone 5C isn’t failing, but rather nailing the job Apple intended with it, and any ideas to the contrary, just don’t understand the purpose of the iPhone 5C.