Cutting Room: Nothing ‘cheap’ about the iPhone 5c


With the iPhone 5c’s price almost on a par with high-end smartphones from rivals, Paul Withers feels Apple has missed a trick by not targeting the mid-tier

In common with thousands of other journalists, my evening on September 10 was spent checking streams and updates from California, awaiting the official announcements of the iPhone 5s and 5c handset.

Having updated the  Mobile News website, I was astounded by some of the news reports about the releases filtering through on TV, online and social networks.

While the 5s got the plaudits for its new “innovative” touchscreen, the main focus seemed to be on the 5c. Words such as “affordable”, “cheaper” and even “budget” were being used to describe it.

Now, there is no doubt the iPhone 5c costs less than the 5s, £80 less to be exact.

But cheap? You have to be joking. Apple would have been thrilled with the description.

After all, the 5c is, by all accounts, a re-badged iPhone 5 – which was launched more than a year ago – and we all know how quickly technology moves.

The least expensive version of the 16GB 5c costs £469 – the same price as for the 8GB version of the first iPhone launched through O2 in 2007.

The 16GB model of the 5c is priced at £549 for 32GB – and it still baffled me how Apple can continue to get away with charging almost £100 for 16GB of extra memory – especially when you can buy a 20GB SD card for under £20.

To draw a comparison with other devices, Samsung’s flagship mobile, the Galaxy S4 16GB is available SIM-free for £489.99 – just £20 more than the cheapest 5c and superior on most levels in terms of specifications. The same goes for the HTC One 32GB, which costs £494.99.

Would you describe any of these similarly priced handsets as budget to your customers?

Of course, none of this will actually matter to Apple, and like clockwork, the usual ‘sold out’ emails will appear in our inboxes and on the front doors of stores.

Missed opportunity

But even so, Apple may have missed a trick here. The market appeared to be ready for a genuinely cheaper model, something which would fit into the so-called ‘mid-tier’ of the market.

Back in April, following the release of its Q2 financial results, CEO Tim Cook claimed that the fact that there are lots of first-time smartphone users “is not lost” on the company.

And throughout this year, it has made numerous hints about making moves to increase market share in emerging markets around the world, and with China and India taking over wealthy Western nations as the largest smartphone markets in the world, Apple was presented with a challenge.

Instead, the company’s share price immediately fell by five per cent in the wake of the announcement, over fears that the price of the iPhone 5c would limit its share in emerging markets.

News of a ‘mid-tier’ model would have sent shock waves across the likes of Sony, Nokia, HTC and even BlackBerry, which are, without saying so publicly, cementing themselves in a space where Apple does not tread.

You could almost hear the sighs of relief coming from Japan, Finland, Taiwan and Canada when the pricing for the new iPhones was announced.

Apple could have caused, a real stir in that space, and grown its market share considerably.

However, while customers continue to remain loyal and happy to spend vast amounts of their hard-earned cash on, in truth, largely inferior models, why should it?

But this is a dangerous game to play. If sales slacken, then it has a huge market of opportunity to move into.

On the flip side – popularity doesn’t last forever – just ask Nokia and BlackBerry.

While the likes of Sony, and indeed Nokia, continue to improve, so will their popularity – and the switch to an Apple product may no longer be of interest – even at a discounted price.