There are plenty of reports available on the web that are focusing on what Apple (AAPL, Financial) should do or shouldn’t do to make the iPhone 5C offering more exciting and appealing to the consumers. I say, do away with it altogether. That’s right. I feel Apple should simply shun the iPhone 5C this year when it comes out with the next great iPhone and I have some very good reasons to support my thought. Let me take you through each of them.
Let’s start with the price factor. Though it’s cheaper than the 5S, the polycarbonate-colorful 5C is not exactly a cheap phone. The 5C costs $549 off-contract and is available with a two year agreement starting at $99. Even in comparison to the huge number of high-end Google (GOOG, Financial) Android powered devices, that’s a high enough price to pay. Now, Apple has rolled out an 8GB variant of the 5C in certain European and Asian markets. This variant is expected to be priced around $499 if launched in the US, not exactly a reasonable price for a device sporting only an 8GB memory and that too for a budget-conscious audience.
For a price-sensitive consumer, spending $449 on a smartphone is a lot especially because of the kind of features that buyer can get even at a lower price bracket. To put it simply, the buyer can get much more for the same price or get the same at a much lower price only if he chooses a different phone maker. So, why will he not? These consumers are not interested to get the feel of owning a premium and exclusive Apple device. They are more focused on value for money and number of features. Without a doubt the flagship models from Samsung (SSNLF, Financial) or Nokia (NOK, Financial) or HTC can any day beat the iPhone 5C on features. These handsets are offering much better value for money.
Next, several studies suggest that the iPhone 4S is preferred over the iPhone 5C. May be it’s the metal and glass combination, maybe it’s the price. Whatever it is, the 5C is getting hit badly because of this also. Consumers are choosing to go for the 4S with a two-year contract and pay nothing for it, instead of getting the 5C at $99 also. Again, another growing trend is buying the 16GB iPhone 5S for $199 with a two-year contract instead of the 32GB iPhone 5C with a similar contract at the same price. Consumers are sacrificing storage capacity just to avoid getting the 5C. That shows something! After this I don’t think Apple should continue with the 5C any further.
Now, let’s take a look at the markets. Which are the two key markets for Apple? US and China. How’s the 5C doing in these markets? Bad! US is Apple’s most important market and it has not been very encouraging of the iPhone 5C. The Cupertino-giant ended up manufacturing more than planned number of iPhone 5S units because the number of consumers expected to opt for the iPhone 5C actually rejected the handset and went for the 5S, resulting in more than expected demand for the 5S and huge inventory for the 5C. Its quiet clear that the 5C is not able to succeed in the US and that leaves Apple with no reason to continue to produce it. The 5C is having a difficult time even in China. There are reports that the demand for the device has completely flattened, while iPhone 5 and the iPhone 5S continues to sport magnificent sales numbers.
Right from the moment Apple launched the iPhone 5C, I have believed it to be a mistake. Usually Apple keeps a close watch on the timing of a launch. But, it seems this time it failed. The 5C was launched as a replacement of the iPhone 5. However, there are hardly differences when it comes to configuration. In terms of looks there surely are differences, but not favorable ones since Apple lovers undoubtedly prefer the metal-glass combination over the polycarbonate finish. So, obviously no iPhone 5 user had the urge to upgrade to the colorful iPhone 5C. Next, the 5C was launched along with the launch of the 5S. The 5S was targeted at the buyers with deep pockets while the 5C was for people on a budget. But the difference in price was not enough to trigger people to choose the 5C. The buyers chose to stretch a little and all went for the 5S, leaving the 5C with poor sales numbers only. No wonder iPhone 5C was such a disappointment.
Each of the above factors clearly hint that Apple should completely shun the iPhone 5C and focus just on the 4S, 5S and the next iPhone. However, if Apple discontinues the 5C, this will be the second consecutive year when Apple would discontinue its latest offerings in 2013 the iPhone 5 released in 2012 was discontinued), sending out a bad message about the company’s lack of vision and changing attitude. Nevertheless, I strongly feel Apple should discontinue the iPhone 5C and focus its efforts on the better innovations in its pipeline.
