Well, here it is. The iPhone 5C. Remember all that talk about this being a “budget” device? That might be the only bit of speculation that didn’t pan out when Apple took the wraps off the handset. For a device hyped up to be Apple’s answer to the low-cost Android devices flooding the market, the iPhone 5C is anything but.
At first glance the 5C’s $99 price tag might seem like a bargain, but that price comes with an asterisk: a two-year contract. It was revealed soon after Apple’s event that the off-contract pricing would be right around $550. That’s hardly going easy on the wallet. It’s definitely not the $300-400 phone most expected.
Because the iPhone 5C was not an attempt to sell more smartphones in emerging markets, despite how rabidly the media and analysts bit into those rumors. Instead, it is a means to rebrand Apple’s yearly $99 offering in order to attract more consumers in already established markets.
Instead of knocking the iPhone 5’s price down to $99, as Apple has done with previous iPhone generations, that handset will be discontinued. It’s internal hardware (with a few modest tweaks) has been repackaged in a plastic shell. A colorful plastic shell. And that, folks, is how Apple can continue to sell last year’s model with all the appeal of a brand new device.
You see, consumers don’t want to purchase last year’s phone just because it’s cheaper (though plenty do). As a “new” phone at the same price point, the iPhone 5C immediately becomes more appealing to consumers seeking a less expensive (but hardly budget) iPhone. Add in a dash of flashy colors and it will surely make the tween market swoon.
The market is already reacting to this case of unmitigated expectations. Apple did little to squash talk of a budget device leading up to the announcement of the iPhone 5C, and yesterday’s revelations have led to a downgrade in Apple’s value on Wall Street.
Of course, Apple has developed other means to attack emerging markets, and they are in some ways tangentially related to the launch of the iPhone 5C. The iPhone 4S will continue to be produced, available free with a wireless contract. An iPhone trade-in program was launched through Apple’s retail outlets, the recycled devices being refurbished with the express intent to sell at discount in regions like China and India.
That doesn’t, however, change the fact that Apple’s biggest surprise at their iPhone launch event was not a new phone feature, but a disappointing pricing model. A pricing model that went against all the analysis and speculation leading up to the unveiling of the iPhone 5C.
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