Thursday, 22 August 2013

Fun Topic: iPhone 5 "C" for Cheap (aka. a mini-priced iPhone)

(I apologize for the lack of posts in the last few weeks. I had my 2nd daughter at the end of July, a few weeks ago and as such, I haven't had a lot of time or sleep! However I wouldn't trade it for the world...)


Above is a sneak-peak at possible cases for the iPhone 5C that is planned to come out in September 2013. From what we can gather it's going to be a lower cost alternative to 5S also coming out at the same time. Ironic, since I had a posting last month talking about how ZTE and Huawei are making huge in-roads into HTC and Samsung largely through cheaper Android devices in Asia (which I believe ultimately where the 5C will make the most impact).

So... down to 'brass-tacks'. Sounds like full-on iPhone 5C will be about $350-$400. That is a reasonable discount when you compare that iPhone 5 is about $650. Ironically it's even cheaper than older iPhone 4S, which is in the $450 range.

Truthfully for the typical consumer this means basically 'free iPhone' with just about any 2 year plan. Now currently most carries *do* offer iPhone 4S $0 for 2 year plan, but only on more expensive data plans and because carriers are trying to liquidate older iPhone 4S stock.

Now you won't *need* iPhone 5X (basic, S or C) to run iOS 7. I believe you can still get it on iPhone 4/4S, so really the only reason to get one is because you don't have one. 

Therefore really, apple is using it's iPad Mini strategy and potentially cannibalizing it's current market share to attempt to squash lower priced competitors in one swoop. When we talk price, we should really talking margin and this PC Mag article that references IHS/iSuppli tells us exact the breakdown of iPad Mini costs. Bottom line is that Apple makes about $141 on an iPad Mini, while Google only squeezes out about $40. That's smart math, more than 3x the profit! That is the real motivation Apple developed or is still selling the iPad Mini

(Tim Cook is nothing if not predictable, as he seems to do the logical, safe bet things these days.)

*UPDATE* Here is another article from Gregg Keizer of ComputerWorld about the margins in the iPad Mini. Says the margin is closer to $90 on the lowest model. Still twice what some other 7" Tablets vendors are making.

So... with any luck we'll get another breakdown analysis showing that Apple is making more from the iPhone 5C than the other guys, ultimately selling more iPhones in total, and therefore more total revenue. Rumours are that the glass back is gone, cheaper plastic and parts are being used and that Siri and other 'premium' add-ons will be gutted. (I wonder if it would be like having iOS run on cheaper Android hardware? Or will it still have the Apple quality appeal?)

However it's done, if more people buy (in total) iPhones with this strategy, Apple wins.

You in the market finally for a iPhone 5C? Or maybe your teenage kids? Elderly parent? Annoying sibling or spouse that keeps taking your iPhone 5? Hit me up and let me know if you are planning on an iPhone 5C and what colour!

Hope that helps...

Wayne Pau.

p.s. Just wait, if this colour thing works out, maybe they will steal another idea and release an iPhone 5X (aka Extreme) that will compete with the S4 Active. A iPhone that would be finally water proof and droppable! No more carrying your iPhone in a ziplock bag...


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