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Did Apple Make a Mistake By Releasing Two New iPhones?
Nerval's Lobster writes "As noted by CNET, Apple hasn't released data on the number of iPhone 5C units it presold in the device's first 24 hours of availability—a first for the iPhone since 2009. Why is that? Reporter Josh Lowensohn speculates that iPhone 5C sales 'may not be as impressive when stacked up against tallies from previous years,' with one outside analyst suggesting that Apple racked up 1 million iPhone 5C preorders last Friday, or roughly half the 2 million presales scored by the iPhone 5 on its first day of ordering availability last year. However well the iPhone 5C ends up performing on the open market, Apple's decision to launch two iPhones this year—rather than a single 'hero' device—could result in self-cannibalism, as users who would've bought the iPhone 5S instead gravitate toward the cheaper option. Cannibalism is a topic that Apple knows well, as it's been dealing with the iPhone cannibalizing the iPod for the past several years; but a new iPhone eating away at another new iPhone is fresh territory for the company. During earnings calls, Apple CEO Tim Cook likes to argue that cannibalization—whether iPhones feeding off the iPod, or the iPad taking the place of MacBooks—is a good thing, so long as it's Apple products eating other Apple products. But it's far more questionable whether he would welcome the iPhone 5C—almost certainly a low-margin device, despite its current-generation components and plastic body—taking a bite out of the more expensive, and presumably higher-margin iPhone 5S. Margin erosion remains a prime concern of investors and Apple watchers; anything that contributes to that erosion is bound to be viewed unfavorably."
Part of the issue is that this is the "revise the device" year for Apple. Even with their immense cash reserves, it takes a lot of time to design a phone, design its form/function, test it internally, and make sure all is in order for their legal department before it makes it out the door. Then, they have to make sure the ODM/OEM are ready to produce the device in the needed numbers.
Because the 5S/5C are not "groundbreaking", Apple ends up with not as many sales as the year when they have something with a completely new design.
Another part is that the 5C models are cheaper to make, so Apple still turns a tidy profit either through lower priced, but less cost to them models or higher cost, higher overhead offerings. The 5C appears intended to help get a foothold in other markets, but in the US, it will do well against the entry level Android devices or the back-generation iPhones that are sold to keep people on contracts.
As for the "hero" phone, the 5C really isn't aimed that direction. The 5S seems to have made to toss a bone to the enterprise, adding another useful (even though this can be argued) security feature so data on the device has another layer of protection.
Heck, since I (and many others) typically encase the phones in all manner of protective cases (I have an Otter case for my iPhone 5 and will be replacing it with a BlueTooth keyboard case soon), a plastic case isn't all that big an issue assuming reasonably similar devices (functionality, not tech specs). If you're giving your kid a phone, you might go with the C and put it in a hard shell of some sort. I've bounced mine, banged against walls, or put things on top of it that a hard case of some sort is necessary.
[John]
Shit better not happen!
Apple made a mistake by not releasing any new iPhones.
Mod me down all you want, it wasn't long ago I was getting modded down for defending Apple and their yearly product releases. I can no longer find any room to defend their smartphone platform.
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Last time I checked, the 5C was more or less a 5 with a few parts changed out for equal-speed but lower power usage. Roughly the equivalent of a slim playstation release. Even if you consider it enough change to be a new phone, it doesn't appear to be all that different from the 5S. It's less powerful and lacks some of the features, but it isn't like it's going in a drastically different direction. It's a little more of a difference than models with more storage capacity would be.
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It's the oldest sales trick in the book -- you lure people in with promises of a bargain, then try to upsell them to a more expensive product. Movie theater popcorn is the classic example of this (OMG it's 2x the popcorn for only $1 more!) but electronics companies have done this for decades.
There's no -1 for "I don't get it."
They made a mistake of not releasing a cheap option....
The "cheap" 5C still retails for $549-$649. I'm sure Apple has a healthy amount of profit with that figure.
I don't see the 5C as a low end device, instead I see the 5S as a premium model. No one pays over half a grand for a low end phone.
"Apple makes money either way"
You nailed it right there
Sometimes I wish Apple was a private company and didn't have to look over the shoulder at "investors".
The alternative was to keep the last-generation phone still around for quite some time as the lower-end device. This way, they are able to cater to the second-rate market while still giving them a refreshed device.
Sig: I stole this sig.
Maybe people are finally waking up and realizing a phone is just a phone. Who cares if there's a newer trendier one out? The old one still works fine!
I wonder if Apple is going to wait until after the 5S is released before providing sales figures to the public?
Those who know, do not speak. Those who speak, do not know. ~Lao Tzu
That whole article is noting more than anti-Apple bullshit. What consultancy got paid by Microsoft for typing that?
Why write this article abut the 5C? It's literally last year's model.
/. Obligatory Disclaimer: I won't be buying either of them.
When the 4s came out, it would have been stupid to complain that the 4 didn't break presale records. The 5C isn't meant to rock you like a hurricane. It's meant to make your consolation prize more palatable.
Actually, what "only hipster dipshits" care about is whether the icons on their phone are kinda-sorta-vaguely-3D-ish.
Last month if someone said they had an iPhone you knew what they were talking about. Different generations, sure, but you knew it was arguably the finest device Apple had ever made, within each generation.
Next month when someone says they have an iPhone the first question will be, "Do you have the cheap one, or the good one?"
While I'm personally not sold on these new "watches", perhaps they should try something innovative and new. Instead, they release basically the iPhone 5 with some upgraded under-the-hood technology and a cheap version for developing markets like China, but is still more expensive than their competitor.
The original iPhone was a great phone, but it sold because it was unique and flashy and the average non-techie consumer out there saw cool new things they could do. Catering to the non-techie consumer market is key because it's vastly bigger than the techie consumer market that understands the under-the-hood enhancements. Each iteration kept staying focused on adding new things that the average, non-techie consumer could grasp, things like a forward facing camera, Siri, better displays, etc. But the newer phone's features are too obscure. I'm not a software developer, so while I understand that there's a better processor under the hood, I fail to see why I should upgrade from my 4S which works fine to the 5 or the 5S. Thumb print recognition means nothing to me, and nothing else is offered that is useful or attractive.
I don't really care if there sales are split and don't make headlines for tech websites. They just need to make great devices that people want. At one point they had 3 or 4 ipods out at once. (shuffle, nano, micro, and touch) They still made tons of money.
the iPhone 5C - almost certainly a low-margin device
How certain is "almost certain"? Considering the history of various sites gleefully posting the component cost list of any new iPhone and pointing out that the sum is a lot less than the sale price, I wouldn't be surprised if the iPhone 5c has just as much a margin as Apple's flagship phone products. In the US - iPhone 5s unlocked price: $649. iPhone 5c unlocked price: $549. iPhone 4S unlocked price: $450.
Unlocked and contract-free. costs about the same as S4 at full price and the 5S costs more.
Samsung offers 31 different smartphone models in my local market alone. They range from awful $79 single core handsets intended for the prepaid market through the S4 and Galaxy Note series. Their shotgun approach guarantees that whatever price range a customer is looking, they're likely to at least consider a Samsung. The problem is that they don't make money on the low end, even though they ship millions of units. It's only the top tier handsets that command the large margins.
Apple is a far smaller company that doesn't have its own manufacturing facilities. That fact alone prevents them from participating in the low end of the smartphone market -- by the time they give Foxconn or Pegatron their cut, the margin on a sub-$100 phone would be unacceptable. It would be a make-work project. By eliminating the iPhone 5 from the lineup and replacing it with the 5C, the company seems to be positioning the 5C to gradually slide into the midrange market in a way that doesn't cannibalize sales from the top of the line glass and pixie dust series.I suspect that it will be under a year before the 5C is available for $0 on contract, with a manufacturing cost that's lower than the 4 that it replaces.
Would you rather sell X number of one product or some factor of X (larger than 1) of two products?
Also, when you sell two new products, at the same time, it is not cannibalization, otherwise, the entire effing PC market is full of cannibals. Hell, how many similar products does Samsung have?
It's market segmentation, idiots.
Do these people even have a damned clue?!
The 5C is nothing new, Apple has always sold a "lesser/budget" phone with the previous year's model, it's just that this year they tweaked the previous years model with a new ccase.
The 5C is nothing more than a 5 with, what I am assuming, is a cheaper to produce case, leading to higher margins compared to just selling the previous year's model.
Seriously? This guys thinks the margins on the iPhone 5c are *lower* than the 5s? In that case, why is everybody else complaining about how expensive the 5c is, and saying it should have been released at a $300 price point? If you believe that the 5c could be made & sold at $300 (and I do), then since it sells at $550, Apple *must* be making something like 40% margins on them. The 5s is $100 more, but I bet it's considerably more-expensive to make.
Sometimes I wish Apple was a private company and didn't have to look over the shoulder at "investors".
They had the largest shareprice drop since year start in one day. The reason was 1. Because they didn't announce a deal with China Mobile and 2. Because they don't have a competitive phone in that market...they thought that would be the iPhone 5C they were wrong.
The alternative was to keep the last-generation phone still around for quite some time as the lower-end device. This way, they are able to cater to the second-rate market while still giving them a refreshed device.
The alternative was having the old aluminium versions of the old phone rather than it being rebadged and put in a plastic case and having a "c" added to the end, many people think that is a step back. I am not sure who is fooled.
Nothing to see in these products. They're just slight modifications of the old ones.
Hah! Android as a selling point for non-zelots. That's an amusing thought.
http://www.informationweek.com/mobility/smart-phones/foxconn-iphone-5-is-hard-to-make/240009249
If you want a device you can sell for 99 bucks on contract it needs to be easier to make.
I always find it hilarious that Apple articles try to spin Apples floundering Mac sales are cannibalised by the iPad, When the iPad is selling *Less* that it did a year ago, in a growing tablet market. Android is dominating on the tablet, and Chrome is growing in the laptop? market.
In the past, outgoing iPhone models stayed around as a less expensive alternative for people. With all of the R&D and other expenses amortized over many, many units, margins were still attractive at lower ASP's for outgoing models. This time around the 5 is no longer available in it's current form. It stays around as a "new" iPhone model on a less expensive chassis--compare the 5 and 5C and you will see the main difference being the housing. The "new" iPhone 5S has the new gee-whiz features, and the 5S will be built on the current, more expensive 5 chassis.
Also, when you sell two new products, at the same time, it is not cannibalization [...] It's market segmentation
It might be cannibalization.
Its segmentation if the new lower tier product picks up millions of new buyers who just couldn't afford the high tier one.
But its cannibalization if millions of users who would have bought the high tier one if it was the only one one on offer, but now buy the low tier one because its available and good enough.
The key to segmentation is to make sure nobody who can afford the high end model would be satisfied with the low end one, that they would rationalize spending the extra to stay in the premium product.
There were numerous reports that the margin on 5C is higher than on 5S. Apple can make more money if everybody switches to 5C.
1. The 5C is essentially an iPhone 5 in a plastic case, with a new cellular baseband chip. It's not a "new model" in the classic sense.
2. It's almost certainly a higher margin item than the 5S, and perhaps even commands the same net profit per unit. Something tells me the A7, better camera sensor and flash, metal case, and fingerprint sensor add up to almost $150/unit in costs.
Maybe Apple isn't releasing the figures because the 5c has 10 million units in preorders and they don't want people who would otherwise buy a 5s to figure out how great the 5c is!
Wow! Wow! Wow! That must be it. Yes! That must be it! After all, no information is as good as solid figures!
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Don't worry, the semi-3D-look will be the new main feature of iOS 8, because Apple responds to what their customers want!
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I don't think its a good assumption that the 5c is lower margin relative to the 5s.
Apple has always sold last years model at a discount. The 5c is essentially a 5 engineered to be cheaper to produce - Plastic (err Polycarbonate) vs Aluminum and I'm guessing other tweaks as well.
The 5s on the other hand has two brand new processors the 64 bit A7 and the M7 (anyone know if the GPU is new too).
I wouldn't be surprised if the 5s is the lower margin device. I think the allowed for preorders on the 5c but not the 5s so they could sell as many 5cs as the good to improve their overall margins.
Apple has shown time and again that, as far as the public is concerned, they know what they're doing.
But because they don't bring out something as amazing as the iPhone and the iPad were when they were first announced every single month, everything they do do gets panned as "not revolutionary enough," "more proof that without Jobs, Apple is DOOOOMED," etc.
So, in the minds of most of the pundits today, yes, Apple made a mistake by releasing two new iPhones. They also would have made a mistake if they had released one new iPhone, or three, or a smartwatch, or a smart TV, or a bloody time machine. No matter what Apple does, the tech press have to find ways to make it fit the narrative of "Apple is Doomed." That's pretty much all there is to it.
If you read the Macalope column over at MacWorld (and read it with a grain or two of salt, of course, because it's primarily intended to be humorous...but it still cuts deep a lot of the time), you can see him point out a lot of the glaring inconsistencies and habitual methods of trying to twist reality to make Apple's successes sound like failures. (Like the old favourite, "compare Apple's current products to hypothetical future products from its competitors.")
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As a current iPhone user who has had over 2 years of headaches trying use such a tiny touch screen,I would be all over getting a new iPhone if Apple would release a model of phone that was phablet-sized ... bonus points if it came with a precision stylus.
(yes, I already know about the galaxy note 2, and I'm planning on getting one [or something similar, depending on what is available at the time] as soon as my current contract is up next April, but if Apple would come out with a feature-comparable phone, I'd definitely get it because then all of my existing apps will all move straight over. Such compatibility, however, is insufficient to make up for the frustration I experience trying to use it)
File under 'M' for 'Manic ranting'
Why the worry about self-cannibalism?
I believe it was Jobs that said that if you aim to protect your bread and butter, someone else will just eat you up.
So Apple has absolutely no issue with creating devices that will eat into existing product lines - take the iPod line. You had the original, then the mini, shuffle and nano. Each of which eats into each other's sales somewhat. But you still sell more this way than any other way.
Or the iPhone. It certainly ate into the iPod (group) sales, and the iPod Touch certain ate into iPhone sales (an iPhone without the phone!)
Or the iPad - it's certainly eating into Mac sales, especially lower end - people who would've bought an Air probably bought iPads instead - it does everything they needed it for anyhow.
If you innovate by trying not to compete with yourself, you end up like Kodak, inventor of the digital camera. However, the digital camera concept was not Kodak's focus, which was selling chemicals, so Kodak sat on the technology until other companies started selling them and film and chemical sales bottomed out. They could've transformed from a chemical company to an imaging one - the bulk of their sales would be chemicals, but they'd have a growing business doing all sorts of imaging - from digital cameras to printers and even having photo printers that develop to regular print paper, selling more chemicals.
If the 5C sales eat into the 5S sales - so be it. Each should compete on their own merits, and if the 5C should prove more popular, well, it means the 5S didn't deliver good value for money.
And just like it was said, they both make money. And the end goal is to make money - if you convert a Samsung user to an Apple user, a plus - who cares if they buy a 5S or 5C? It could also be if you didn't have one or the other, the user may have stuck with Samsung. And yes, there will also be users who go from Apple to Samsung.
The iPhone-C is a low end device with older hardware. Which means it will become obsolete faster and owners will upgrade in shorter time than iPhone-S owners will. Also, the price difference is not all that high (550 vs 650 USD for iphoneC and iphoneS). Assuming it is $50 cheaper to make iPhone, Apple will recover that in quicker upgrade cycle. Also, it allows Apple to sell iPhone to users who would have gone most likely to Android. In fact, this is the best thing Apple could have done. Apple's recent fall of stock price is because the investors believes that it should have introduced an even lower end device which they didn't. So imaging what would have happened without iPhone-C?
The last time people thought Apple was making a huge mistake and cannibalizing their own sales was with the iPod nano replacing the iPod mini, and we saw what a *disaster* that was.
Steve Jobs even said that if Apple doesn't cannibalize their own sales, somebody else will. This is such a non-issue that it's laughable.
Ask me how the Heisenberg Principle may or may not have saved my life.
If Apple doesn't cannibalize some of their own phone sales, lower-end Android smartphones will eat those sales. Apple is not as able to command a premium price as formerly.
Apple products are well-made, work well, work well in the Apple ecosystem, and are premium priced. In the early days of the iPhone, Apple successfully sold premium devices to customers who normally don't buy premium, because those customers couldn't get a non-sucky smartphone anywhere else. And buying an Apple smartphone, even at a premium price, still only means a few hundred dollars of extra expense.
But as the premium Android smartphones of yesterday move down and become the budget Android smartphones of today, there is less need to pay a premium to get a nice smartphone. Apple needs to compete on price.
With the 5C, Apple is trying to walk a fine line. They are trying to lower the entry-level price of an iPhone enough to keep sales that would have gone to Android phones, while at the same time they are trying not to take too many sales away from their top-of-the-line iPhone. (IMHO the plastic case is an inspired bit of product segmentation. Whether it's significantly cheaper or not, it serves as a nice differentiator between the bargain iPhone and the premium iPhone.)
I think in the USA, the 5C will serve its purpose pretty well, because most people get subsidized phones and the $100 subsidized price looks attractive. But worldwide, the entry-level phone customers will all be buying Android devices. I don't think there is anything Apple really can do about this. Their choice is either to accept lower profit margins on phones, or else watch as Android solidifies its hold on developing markets. The conservative thing for Apple to do is to keep charging premium margins; if they ever slash their prices it will be very hard ever to change their mind and go back to premium pricing.
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where an apple was eating me!
(adapted from Seinfeld)
The harsh reality is the 5C designed to fool consumers in the highly subsidised American market, but fooling those customers into believing they are buying a phone at half the price $99 vs $199 (That one dollar fools people :), when the unsubsidised price is $500 more.
Apple found customers were cannibalising their latest model with their older model is sells...rather than having a range and it was killing their legendary margins. The 5C is simply a a cheaper version (using plastic and sharing some components with the newer model phone) of the old model...while still maintaining margins, cementing unapologetically plastic phones(sic) like those made by Samsung as being cheap, while pushing people to the newer model (people are drawn to models with more).
So did apple make a same mistake by launching two phones...not if you were happy with the old strategy, or if you think plastic on the old phone is *cough* premium. The old model + new product line with high mark-ups does not work in countries where highly subsided phones do not exist, and their are cheap and plentiful (and I would say better) alternatives. We continue to the erosion of Apples Market share (and Profits, Brand value, Sales) and this strategy does not change that, as Apple is becoming a niche product whatever you think of that.
This story makes two primary points:
1. The 5c is selling poorly.
2. The 5c will cannibalize 5s sales.
Anybody see a problem here?
Orange whip? Orange whip? Three orange whips.
Apple hasn't released data on the number of iPhone 5C units it presold in the device's first 24 hours of availability—a first for the iPhone since 2009. Why is that?
Perhaps they are waiting to post the results when the iPhone 5S gets its first 24 hours of sales? After all, releasing two new phone models is a first for the iPhone since . . . forever.
They'll sell them as fast as they can make them and rake in huge profits.
Kind of the whole point.
Apple has shown time and again that, as far as the public is concerned, they know what they're doing.
Apple have shown time and again that they can maximise products in new markets by hoovering up all that ealier adopter money only to flouder in the maturing market. Steve Jobs Said. "What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.”
The bottom line is Android now dominates in Tablets and Smartphones and Apple is relegated to niche product. I am not sure whether Apple will survive in the electronics market as a niche product.
So when was the last time Apple offered only one iPhone for sale ... other than when they were first introduced?
Apple has always done segmentation in the iPhone market and folks are just confused because this time they introduced a visinly new product for their intermediate price segment instead of making internal-only changes like when they introduced the 8GB version of the iPhone 4 after the 4S came out.
You're arguing that Apple should never have offered the 4 for sale after introducing the 4S and should never have offered the 4S after the 5 shipped, but historical sales records don't agree.
Timing... for developers.
You want to get your 64-bit processor out the door so that people who make apps that might benefit from more than 4gb of memory can start to write their apps for 64-bit BEFORE you actually start shipping phones with more than 4gb of memory. This allows them time to convert to 64-bit without being rushed into it. It also gives your OS developers time to get the 64-bit OS out the door. If the 64-bit OS isn't ready when you ship the product, you release with a 32-bit OS and you just don't advertise the 64-bit feature. (Or you say "64-bit ready" or something like that and promise the next OS release will bring 64-bit to existing phones.
In short, as a consumer, you don't care... yet. You want the 64-bit in a year or two when you have 8 gigs of memory in your phone. In order to have applications for that 8-gig phone, you want Apple to release a 64-bit phone now, so that developers will be ready with 64-bit applications to put on that 8-gig phone.
The other aspect here is that most architectures tend to clean things up when they move to 64-bit, and ARM is no exception. Some of those architectural changes that come with 64-bit will be more valuable sooner, and could translate to performance boosts right now on some applications that switch to the 64-bit architecture.
The narrative around Apple has certainly shifted, and this is having a tremendous impact on how people view what Apple is doing. Especially hear on Slashdot, people seem anxious for any sign that Apple is failing.
Uh, you're just now tuning into the when will Apple fail meme that's about 20 years old? Apple has always been just about to fail, even with they had quarters with 100+% profit grown YoY.
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The smartphone today is what the PC was in 1999. It's a technology that's gotten into the hands of most people that want it. Instead of charging high prices and adding features, they now have to lower prices more aggressively and just tweak features. Fingerprint reading is exactly the kind of tweak laptops were getting 10 years ago. Mine has one. It was interesting when I got it, but logging in was a hassle so I never used it. It's a tweak.
Welcome to the flat part of the saturation curve, Apple.
1) This "low-end phone" is twice the price of low-end Android phones like Nexus 4
2) After selling 250 million+ iPhones, they aren't cool devices to have any more.
Mac sales are failing even when the opposition is Windows 8 the most hated OS ever. Chrome OS that brought out he Pixel the best premium laptop on the market, is the only growth part of the market.
The bottom line is Android is not dominating the low end...even if you capitalise it. Its dominating the whole market. The sad reality is Apple only do mid-range phones, and this was their most disappointing launch yet.
cannibalization of an apple product by another apple product is a good thing.... except of course for the massive waste and human suffering involved in manufacturing the cannibalized line of products.
A) no one knows how many 5C's were sold because that data hasn't been released, and B) No one knows anything about cannibalization because numbers aren't out on the 5C and the 5S hasn't been released yet. Your hater skillz need work.
Uh, you're just now tuning into the when will Apple fail meme that's about 20 years old?
20 Years!? you have no idea. this is the Video of steve Jobs in 1997 http://www.youtube.com/watch?feature=player_embedded&v=WxOp5mBY9IY announcing Apple being rescued by Microsoft. This is what Steve Jobs thought "What ruined Apple was not growth They got very greedy Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share.” many of us see the symmetry with Apple today. What we don't see is unlike the PC market Apple existing as a niche product.
If Apple was worried about cannibalization why would they make the 5C available for preorder one week before the more expensive 5S? In other words, it doesn't seem like they're worried.
Seems to me that the iPhone is following the same path as the iPod to some degree.
Apple released smaller colored less powerful iPods once the market had largely run its course.
Nothing new here really. What surprises me is people acting as if all of this course Apple is following now is somehow completely new.
Seems to me that the iPhone is following the same path as the iPod
The iPod had a range of products at every price point in the market, backed with an exclusive music catalogue. with the media, and armies of fans of its techno hippy days. The iPhone/iPad both chose to go for profits over market share, by having one customer gouging product, and both are becoming niche products, that is a completely the opposite strategy of iPod...now if you were talking about samsung that have a range of products, that would be different.
In previous years, Apple released a brand new model, and dropped the price on the previous best model. When the iPhone 5 was released, no one compared the orders of the iPhone 4S against the prerelease sale of the previous leader (again, the 4S). You really couldn't, because there was no new prerelease numbers to compare. People were preordering the 5, and could continue to walk right into a store and buy a 4S.
We should be judging the preorders of the 5S against the preorders of the 5 last year, and not get into hand-wringing over the numbers on the 5C. This is a one time deal, where Apple is creating a consumer/pro division in their iPhone line, just as they did in previous years with their PowerBook/iBook, PowerMac/iMac lines.
Just like the iPods before.
Nothing like iPods, which occupied every price point, and locked competitors out of the market, and was a range of products. Apple is currently 13% of the market. Every other company has a "product range", only Apple insist on selling its old products as a product range...butting it in a cheap plastic case to improve margins has not changed that. Perhaps you are thinking of Samsung.
The 5S is aimed at the corporate and tech head market. The 5C is aimed at the "teens" and lower end market. Its long term strategy too, these phones will probe still being sold new in 2 years time like the 4S still is. So they need devices that teens will still want in 2 years (how about a new range of colours?) As for canibalising: its competing with itself - sometimes a good thing. Consumers think they have a choice, the 5C or the 5S. They will fail to realise that there are plenty of other options out there too, Samsung, HTC, Nokia, Sony, etc.
The 5S is aimed at the corporate and tech head market. The 5C is aimed at the "teens"
Bullshit. They are both squarely aimed at the consumer market, and that is exactly the right thing to do. Steve Balmer famously laughed of the iPhone as not suitable for the business market, his recent replacement thinks perhaps he should have thought differently.
Apple has forgotten that people will happily pay Apple premium prices for sexy and novel products, but will pay anybody the lowest price possible for mundane, widely available features. Why would apple want to associate itself with commodity products?
I think when PC sales worldwide drop by large percentages and and Apples dropped by fewer than the overall trend, then that is actually resulting in a larger market share for Apple overall. Just saying ... that is what the actual numbers would seem to indicate.
Except actual numbers say no such thing :). Mac is down 2%; 22% and 5% YonY more by quarter. http://investor.apple.com/ PC sales show a drop of about 10% https://www.gartner.com/newsroom/id/2544115 ...basically mac sales are if anything dropping faster. Just Saying you should check your figures.
I predict they will sell minimum 8 million iPhones on the start weekend.
Pre-Orders of the 5C are irrelevant. 5S is where is real dough is.
As you can't preorder the much more important phone, naturally there aren't any preorder numbers. Wouldn't make sense.
Analysts are idiots.
Their profits continue to grow.
Apple has always been a "niche product."
Except Apples profits are falling, and their is no evidence that Apple being a niche product will work like it has in the PC market, and lots of evidence that it is going to struggle.
But its cannibalization if millions of users who would have bought the high tier one if it was the only one one on offer, but now buy the low tier one because its available and good enough.
Depends on the profit margin.
Yes, if you're making $100 profit on the high end phone, but only $50 profit on the low end phone, people buying the low end phone will be "cannibalizing" your sales.
But if you're making a flat $100 on both the high end phone and the low end phone, it doesn't matter which your customers buy. You're getting $100 per phone either way. It's just your component manufacturers (for those portions of the high end phones you leave out on the low end ones) which suffer.
Heck, even if you're making less on the low end phones it could be a good deal if you pick up more profit from new customers than you lose from people switching. Say you have a $100 profit on the high end phone, and an $80 one on the low end. It doesn't matter how large a percentage of your customers settle for the low end one, as long as for every 4 that settle you pick up at least one who wouldn't have bought the high end one.
(Disclaimer - example profit numbers pulled from bovine neither regions.)
Nothing revolutionary here and with the embedded fingerprint scanner, nothing good can come out of it. As if Apple users weren't already good targets to hack at starbucks, now they have to watch out for their fingers getting dismembered. I'm pretty sure though that these people will lobby for a ban against knives if it happens regularly LOL. Either way, Apple fanboys are going to jump onto their new phones like there's no tomorrow and I'm already seeing that over facebook. It's quite sad to see the sheep be so eager to jump onto this. At least Microsoft/Android fanboys don't go around dry humping every phone that is released because quite frankly unless it's a jump from the S2 to the S3 or a new technology in unbreakable phones like Nokia likes to dish out, then we tend not to waste our money on over-hyped products but there are those that do and I won't deny that. Apple really is a cult and any of their competitors are jealous that they can't get their followers to worship them as they worship Apple. Apple did that part right, so kudos to them.
The difference between iPod at the time and every other mp3 player at the time was that no other player really rose in the market which could equal apples ecosystem and simplicity.
Ignoring that the iPod copied creative (they were successfully sued). Android has a larger ecosystem and is ahead on its OS(iOS7 goes a long way towards parity). I am not sure what point your trying to make. Again Samsung+Google are the iPod solution, by your own description of the iPod. Right now Apple is *sacrificing* market share for profits. That is the opposite of what apple did with the iPod.
yeah so dominate I get 3 customers in my no-Apple-product store walking out to go up to Best Buy for an iPad to every one who comes in for a 99 dollar Asus tablet.
http://www.idc.com/getdoc.jsp?containerId=prUS24253413 as you can see your figures are different from those in the real world where apples sales are down YonY 15% when the Market grew 60%. Samsung actually sold 4X the tablets of Asus (Samsung growing 280% and Asus growing 120%).
Again iPads Sales Down; Market Share Down in a growing market. I assume you stack shelves.
Apple's tiny 13%? Who is the leader? It's not like someone has 60% and Apple has "only" 13%.
http://www.idc.com/getdoc.jsp?containerId=prUS24257413 is the screen too small to search properly. For your information Android has 80% with Samsung being double Apple.
The Apple bonds that were offered in April are down almost 20%.
It's not pretty, what's happening over there.
You are welcome on my lawn.
Slashdot has really gone down hill.
Except Apples profits are falling
IIRC (I don't have the figures in front of me), it is their profit growth that is falling, not their profits themselves.
Dan Aris
Last two quarters
http://www.apple.com/pr/library/2013/07/23Apple-Reports-Third-Quarter-Results.html
"The Company posted quarterly revenue of $35.3 billion and quarterly net profit of $6.9 billion, or $7.47 per diluted share. These results compare to revenue of $35 billion and net profit of $8.8 billion"
http://www.apple.com/pr/library/2013/04/23Apple-Reports-Second-Quarter-Results.html
"The Company posted quarterly revenue of $43.6 billion and quarterly net profit of $9.5 billion, or $10.09 per diluted share. These results compare to revenue of $39.2 billion and net profit of $11.6 billion,"
Is your screen size too small to do a search before posting false information. Profits are simply falling YonY and by quarter from apples own financial statements.
...the phones could be given away.
The point is that the Mac decline is not exactly surprising or alarming considering the whole market for PCs is tanking.
I'm surprised. Its like a little guilty secret. Mac sales are failing because they are pricing themselves out the market and they are only focused on the mobile market. Chrome OS is doing rather well on the PC. Going forward as Apple turn their (not your) General purpose computers into electronics, their sales will continue to erode.
So the "c" in the iPhone 5c stands for "cheap". Not in price, but in cost to produce.
Up until now, when Apple released a new phone, the previous version would be sold for a hundred bucks less in order to offer a less expensive iPhone to the market. With the iPhone 5s coming out now, they've decided that they can produce a new, cheaper, uglier, easier to make version instead of continuing to produce the actual iPhone 5.
In other words, if you're going to spend the money on an iPhone 5c, you would be way better off spending it on a used mint condition iPhone 5 instead of Apple's little bastard.
I am not sure what your point is. you post 4 Quarters that have sales drops, and are trying to argue that because 3/4 of those the PC losses where higher *in* those quarters ignoring the fact that in the other quarter Apples sales dropped more than any Apple quarter.
As for publishing Apple Profits compared to what were Windows OEMs you tend to forget that both Intel and Microsoft have been on 70% Gross Margins for forever. Its still very much a Micro$oft world.
The bottom line is the halo effect is over your figures show that. Apple computers are simply overpriced. What is interesting is OEMs are turning to Chrome and Android on the Desktop, and are growing, they seen to think they can make money from this.
How is Android ecosystem larger?
They have more Applications on more devices at more price points with features to match all consumers needs.
So I mean by every measurable metric.
Well, your bovine's nether regions have pretty clean numbers. I'm impressed :)
Because unless you count the Surface which MS just took a $900 million loss on, they don't make hardware. But you seem to forget that Apple's iPhone revenue alone is larger than all of MIcrosofts revenue and Apple is more profitable.
That must be why HTC, Motorola, and all of the other Android manufacturers are making record profits....
HTC just announced massive layoffs, Motorola has been haemorrhaging money for years, Etc. The only company making money off of Android is Samsung.
Also price is also very similar. One can get android devices for zero money down, one can get iphones for zero money down at least in the US. Or one can pay roughly the same for a iphone 5 or Galaxy 4s at the upper end of things.
If by a larger ecosystem you are meaning Applications, I would say that Applications, once you are verging on 600k apps in both app stores is a rather meaningless metric.
Except its not true. Apple is only similar in price if its masked with the massive subsidy on a two year contract...which is basically the American Market (In China its $700 vs $130). That is the whole point why its share place had its largest drop since year start everywhere else the iPhone is simply overpriced and looks stupid in markets with little or no subsidy, and this panicked investors. In contect of this Article they think Apple is making a Mistake
I find it hilarious that now Android has more Applications is a meaningless metric.
Either way you seem to be adding nothing to the discussion and your points are increasingly off tangent, and quite frankly insane
The cannibalization arguments presented only make sense is costs of production of the 5c is less than for the 5s. I bet that Tim Cook has margin under control so that there will be not cannibalization of profits.
Furthermore, the argument makes less sense when considering that 5c purchasers will have an extra $100 for purchase of a new iPad!
Same screen, camera, ram, storage and CPU as the iPhone 5.
Cheaper plastic body though. It's also a bit bigger and heavier.
5% larger battery.
It's a plastic iPhone 5 with iOS7.
I am little confused what has Microsoft laughable failure in the Mobile Market got to do with its massive profits in still makes from its Monopoly in desktop.
I am also confused why instead of mentioning Google? why you mention HTC and Motorola. Motorola does not Appear in the top ten Android manufacturers, and HTC is 10th, and is also a windows phone manufacturer. Coolpad/Yulong; Sony; ZTE; Huawei; Lenovo; LG all sell more phones than both these companies and are doing very nicely....But even more so what this has to do with Chrome and Android on the Desktop?
The bottom line is other companies are unlike apple growing profits.
"Another part is that the 5C models are cheaper to make" ... "iPhone 5C—almost certainly a low-margin device".
This is possibly the stupidest "article" I've ever seen on slashot and it makes me question spending any more time bothering to read slashdot.
...released the 5s:
Did Apple Make a Mistake By Releasing One New iPhone?
Sure, until the next week when phone companies start subsidizing iPhone 5's at 99 cents.
For one thing, subsidies are a U.S. thing, and 95 percent of the world's population lives outside the U.S. For another, if you're a carrier trying to convert feature phone customers to smartphone customers, good luck fighting the sticker shock when they see the price of the cheapest subsidized plan. This page claims that 450 minutes, 300 MB, and SMS would cost $1,920 plus taxes and fees over the course of a 24-month contract.
If the majority of the market is contract
All that means is that 49 percent or fewer cellular customers use T-Mobile or prepaid MVNOs such as Straight Talk. First, you'll have to show me that this is the case, especially now that the three major contract carriers have their own prepaid offerings, such as AT&T's GoPhone and Sprint's Boost and Virgin. Second, you'll have to show me that these 49 percent or fewer customers are somehow irrelevant in the market. There's a name for letting the 51% dictate terms to the 49%.
It seems to me that me advantage of launching 2 phones is that it is possible that Samsung was blind to the development of the A7. Lots of articles pointed to TMSC coming on line next year.
there's probably gazillions of parents who'd rather buy their kid a plastic phone that won't shatter or dent as easily as the 4, 4s, 5, 5s
And there are probably gazillions of parents who don't want to pay hundreds per year for the kid's voice and data plan. MVNOs such as Virgin still sell dumbphones and pay-per-minute voice-only plans.
While Apple tech is good it's not /that/ good. It's not worth the premium. It's not nessessarily /the best/. I see plenty of people talking around with smashed screens.
However the premium is image. It's jewellery. It's about showing you have enough money to join the social club. "A lifestyle choice". A mate worthy of mating with.
Is Apple as chic as it was? Surely not.
By reducing the price they have severely threatened their position as /the most expensive phone/.
Now there's phones like the Galaxy X to the power of n with an even bigger, even more vugar display of peacocking neanderthalism showoffmanship. Not only is it bigger... but most importantly, it's the most expensive and therefore... is beginning to be seen as the most exclusive. It doesn't have the cool. But if it ever does then it then becomes top dog.
Perhaps Apple knows that it has both cool and price premium exclusive and decided secure enough to forgo one in order to work into cheaper markets - where the lower price option is still relatively exclusive.
A blog I run for the wealth
But its cannibalization if millions of users who would have bought the high tier one if it was the only one one on offer, but now buy the low tier one because its available and good enough.
Case in point: Wendy's introduced the W cheeseburger, priced between the Super Value Menu (now the Right Size Menu) and the more expensive full-sized sandwiches. The intent was that people like me who routinely bought from the Super Value Menu would trade up to the W, but instead, people traded down from the full-sized burgers, and the sandwich ended up reducing Wendy's margins.
The iPhone 5C is not really a new phone. It seems to be an iPhone 5 that went through a cost reduction process.
Hence the existing iPhone 5 being discontinued rather than demoted to a lower price tier.
Not only does this help preserve Apple's profit margins at the midrange price tier but by making this phone "less attractive" to those who can afford an iPhone 5S Apple reduces cannibalization. If the original iPhone 5 were still available too many people may have opted for it over the 5S. This will happen to a lesser degree with the 5C.
I've seen way more skinny-jean wearing hipster dipshits walking around with Sammy phones lately.
The iPhone is stuck with it's 1136 x 640 resolution and this would just look crappy with a larger display.
How crappy would it look next to the density of the iPad mini?
Every other company has a "product range", only Apple insist on selling its old products as a product range
You'd be surprised. At various times in the video game console market, a lot of console makers have simultaneously supported an older console and a newer console. Sega did this with the Game Gear (a size-reduced Master System) while the Genesis was out, Nintendo did it with each Game Boy or DS and its predecessor, and Sony did it with the PlayStation 1 and 2 and then with the PlayStation 2 and 3. (Source: "Daddy System" on TV Tropes) And even in the cellular market, I've seen prepaid carriers sell older models in Samsung's Galaxy S line to price-sensitive customers who understand the $1,000 per year price of a contract phone.
Sorry, but if you think the iPhone 5C is almost certainly low margin, you are clueless.
If the 5C doesn't sell well, then that means their higher priced 5S will sell well. If the 5C sells well, it's cannibalizing the 5S.
Samsung is the only company making money off of Android. Motorola has caused Google to lose millions each quarter on Android.
Besides that, Google admitted that they make more money off of ios users than Android users.
Only a five year old cant see that between the current generation and the previous, with *only* a 100 dollars difference, that is no cost, and people will skip it and buy the 5S. People arent that stupid. Actually, with such a small difference in price, it is idiotic to run two different production lines. Shame for apple, with a half price unit, they would still have the people who wants the latest and to be trendy, that would bought the 5S, and they would kill the rest of the mobile market with a *really* low cost device. A golden opportunity lost.
Apples marketing decisions now seem to be vastly more important than the actual product...
All they need to release are figures for the iPhone 5 family then, insteaof reporting each device separately.
Crow-sourcing of fingerprint collect, collect your own for the NSA to get yayyy ;-P
Don't forget that patent that Apple outed 2 weeks ago, showing how a fingerprint reader can double as a NFC reader. Apple could still pull a fast one and unlock a sleeper hardware feature. Though the last time they did something like that (regarding latent 802.11n support in iMacs) they had to deal with accounting issues as it materially changed the nature of the hardware they were selling.
...I just want a Haswell Retina MacBook Pro. Unless I get sick of waiting and just get an Ultrabook. Going back to a Linux desktop full time which would suit me fine anyway.
I went into an Apple store and held my Android phone up against one of their tiny child sized iPhone screens and just laughed. iOS apps aren't too bad, I really like iPads but their tiny phones are a joke. They aren't going to get people back from Android with those things and they are going to lose OS X users if they can't be bothered to refresh their other products.
5C is yesteryear's tech packed into a cheap plastic body, and it sells for only $100 less than 5S. You can be sure that it's the higher margin device. It's also massively overpriced. If they halved the price, it would be a good deal given that you can look past the tiny screen..
Fuck Apple and fuck its snobbish useless products... I hope this self-cannibalism theory will happen, and for once and for all they will be so fucked up trying to do really something good, instead of doing just marketing and selling the same shit like anybodys but always more expensive... For what the hell a normal user wants 64bits and the bio-metrical sensor (don't tell me it is because of security, those bastards were giving all the info that NSA asked for).
A humorous misreading of your post makes me think that yes, the entire PC market may well be full of cannabis.
Because you apparently have trouble with reading comprehension: He was remarking on the fact that the story makes two contradictory points. Both of these would indicate that Apple has made a huge mistake, but at least one of these can't actually be true.
I am sticking with my 4S until it is rendered too slow by the OS. A faster processor doesn't really mean anything these days. Most of the apps I run are not processor heavy games. Bigger screens and coloured cases are all window dressing really.
I have excellent Karma and I am not afraid to Troll it.
... that hasn't happened yet?? According to the OFFICIAL announcement, pre-orders begin on September 20th .... today is Sept 17.
But hey, why allow simple and verifiable facts get in the way of a good Apple bashing reporting from an incompetent idiot??
Can we get on with the next new gadget that makes a lot of money. I'm bored with phones.
Yes. Please see this video (SFW) for clarification from africa:
iPhone 5S and iPhone 5C Problems : http://www.youtube.com/watch?v=VzNVX_nRoFw&feature=share&list=UUJY2MPA8T9OTG7dw_MqDlUg
My belief is that most people are holding out for the the 5S as the 5C, when you boil it down, is just a iphone 5 in a new case. While the second revision iPhones (3GS,4S) have arguably never been groundbreaking, the iPhone 5S has some new features that will be taken advantage of right from the start. The fingerprint scanner on the phone, if it works seemlessly, is an ahh-moment in the evolution of phones. It breaks the mold, it makes something simple and it makes a daily annoyance go away. Not to mention, the second gen phones (4S, for example) were arguably not as frenzied over as a new gen phone. The only thing new here is the extra phone and time will tell if that will continue on in the next version iPhone.
The mistake was not discontinuing the 4S. It's in Apple's interest, and the interest of the accessory community, to get rid of the old accessory connector and consolidate the market on the new Lightning connector. I expected that their announcement this fall would do that.
Steve Jobs resuscitated Apple not by listening to investor.
He did it by creating a demand for a product. A demand geared towards expensive items with high mark up that where desired by everyone. He did it by looking at grate ideas and pushing until they happened. Or pushing until they figured out the tech wasn't ready and moving on.
With the new plastic iPhone,Apple will become another Dell. No real innovation, trying to sell to the lowest common denominator for a razor thing mark up.
Apple has shown, very clearly, you do not need to sell to every human being to be profitable.
The Kruger Dunning explains most post on
The only company making money off of Android is Samsung.
And Microsoft of course.