Unless Apple has another hidden surprise to delight fans of larger screen smartphones, that means two classes of iPhone. iPhone 5S with the latest and greatest components, and the iPhone 5C, the cheaper iPhone. What is Apple doing and what does it mean?
Cheaper? Or, Less Expensive?
It’s too easy to throw around the term ‘cheaper iPhone‘ when we still don’t know the price or the specifications or how it compares to the flagship iPhone 5 or 5S.
As smartphones go, just as Apple did with MacBook Air and the Mac mini, the cheaper iPhone 5C won’t be cheap, and won’t compete on price with the truly cheap plastic throwaways from China.
What’s going on? Apple blinked. The first blink.
While the company is selling more iPhones than ever, there’s a huge gap developing between the iPhone pricing model and the ‘good enough’ competition that owns the marketshare category.
Assume for a moment that the iPhone 5C is aggressively priced at the mid-range, rather than attempting to compete with dirt cheap smartphones with no-name brands.
That means Apple is willing to cannibalize sales for the iPhone 5S to grow marketshare, something Apple doesn’t do much, but has some experience (iPod mini, meet iPod nano).
There will be plenty of us who will stand in line to purchase a 128GB gold plated iPhone 5S, but Apple also makes a ton of money from the ecosystem lock-in (few people switch from iPhone to Android, while many people make the other switch).
Owners of cheap, plastic, nearly throwaway smartphones have a distinct migration path to a platform of trust, security, and a comfortable ecosystem with an iPhone 5C. Apple is banking on the basics of customer satisfaction.
Once you buy an iPhone, you’re likely to stay an Apple customer.
Alright, so Apple blinked and decided to take a bite into smartphone marketshare with a true-blue iPhone (that may actually be blue– and red, orange, yellow, etc.). What’s the second blink?
Apple will blink again when it comes to a larger screen iPhone, that’s not quite a Phablet, but at 5-inches or so, competes well with the Samsung Galaxy S4 and company. My own research indicates there are more larger screen smartphones than ever, and the numbers are growing fast (10 subway rides a week from Brooklyn to Manhattan and back is my usual research methodology).
Here we are barely a few years into the Tim Cook era, and Apple is learning how to blink, and I’m not sure that’s a good thing.