Before the launch of iPhone 5c, everyone believed it would target the entry-level market and would come with a low price tag compared to the high-end model. It turned out to be otherwise, and everyone bashed Apple about the colorful iPhone’s price.
During their recent earnings call, Apple CEO Tim Cook shared some insights about the iPhone strategy, explaining that the iPhone 5c was launched for the mid-tier market, not entry-level. For those customers, Apple is still selling the iPhone 4s.
According to Tim Cook:
If you look at what we’ve done, we’re selling the iPhone 4s as our entry offer. We sell the iPhone 5c as the mid-tier and the 5s. Our goal is to have growth across the iPhone but we want each of those categories to grow as compared to what we were doing previously. If you look at the total that we’re making in the low end and mid tier and high end, the sum there, we’d like to grow in each one of those. We’re really please that we did that.
When Apple launched iPhone 5, it kept iPhone 4 as the entry-level smartphone, which was discontinued when the iPhone 4s took its place.
What we did with our lineup this time was the 4s is replacing the 4. If you look at the US as an example, the 4s is now free. The 4 was free previously. When you translate that out of the US, it depends on the market as to what specifically happens. Currency changes and the strength of the dollar doesn’t always play in our favor in some goes.
We see the 4s as our entry iPhone offer that gives somebody the ability to access the entire ecosystem as a fantastic product. We understand that there is elasticity in that market and it will move accordingly.
Apple sold over 150 million iPhones in the current fiscal year, which is 25 million more than in 2012. Apple also managed to sell over 400 million iPhones since its launch in 2007.
There’s no denying the high-end iPhone 5s is more popular than the iPhone 5c in terms of sales, as the difference in price is just $100 either on-contract or off-contract. And, it doesn’t make sense to buy a handset that features old specifications when you can get the high-end model for an extra 100 bucks. But, as our editor-in-chief mentioned in his iPhone 5c review, everyone has his own preferences, and the colorful model appeals to a totally different audience.