Is the price of Apple’s new iPhone 5c too high for the market for which it was intended?
Not according to CEO Tim Cook, who said the device isn’t intended for the unsubsidized prepaid customers that many observers thought it might be. During a Monday earnings call, Cook said the 5c isn’t the long-rumored “budget iPhone,” nor was it conceived as that.
“If you look at what we’ve done with our iPhone line, we’re selling the iPhone 4s as our entry-level offer,” Cook said. “We’re selling the iPhone 5c as sort of a mid-tier offer and then we have the iPhone 5s. Our goal is to have overall growth for the total iPhone [line], but also growth within each of those categories. … I realize that some people were reading rumors that the entry phone would be the 5c, but that was never our intent. Our entry iPhone is the iPhone 4s.”
In other words, Apple’s plan all along was to use a legacy device as its entry-level iPhone, just as it has done for years. And, as I’ve written before, the 5c was a move to establish a new mainstream price band between the smartphone market’s high end and its low end: “Historically, Apple has done quite well for itself using mid-tier products with lots of aspirational appeal to draw budget-conscious consumers into a higher price range. It did it with the iPod nano, and again with the iPad mini.”