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  • The iPhone 5c Myth

    July 3rd, 2014

    There's a common meme in the tech and financial media that Apple's mid-priced iPhone 5c was an embarrassing failure. This was no doubt buttressed by the statement from Tim Cook last January that the projected sales mix was off for the December 2013 quarter. This meant that more copies of the iPhone 5s were sold, and fewer copies of the iPhone 5c.

    Thus a failure.

    Now the design scheme behind the iPhone 5c was obvious. Rather than sell the previous year's iPhone 5 at a lower price, Apple put the guts and some minor hardware enhancements into colorful plastic cases. Plastic is supposed to be cheap, but Apple managed to make it elegant. Regardless, it was clear from the very first day that you could easily get one, but, at the start, getting the top-of-the-line iPhone 5s was more difficult. That was the start of the belief that the cheaper iPhone must be a failure.

    Indeed, some media and industry pundits said Apple priced it too high. Wasn't this supposed to be a cheap iPhone? But that honor went to the older iPhone 4S, which is, to this very day, still in Apple's product lineup, although it will probably vanish by fall.

    In any case, the presumed failure of the iPhone 5c was yet another alleged example of Tim Cook's supposedly failed leadership at Apple. Would Steve Jobs have done that? Or would he have simply put the iPhone 5 on sale for less? But the real question is whether the 5c received higher sales than simply selling the previous year's model. If it did, it was no doubt successful.

    So came a commentary from commentator Daniel Eran Dilger, in AppleInsider, which revealed the iPhone 5c had actually smoked competing smartphones from Android and other mobile platforms. This wasn't the first time Daniel had provided evidence that a failure wasn't a failure after all, and that the belief that the 5c didn't do well was nothing more than a myth.

    So comes a report about research data from Kantar Worldpanel ComTech, which reported that, in a survey covering UK customers, the 5c actually outsold Samsung's flagship smartphone, the Galaxy S5, in May. Lest we forget, the iPhone 5c came out last September, but the Samsung was released in late April of this year, thus being the new kid on the block.

    All right, there was one silver lining for Samsung, which is that 17% of those buying their smartphones had switched from the iPhone. That's a huge headline, although it ignores the fact that the movement in the opposite direction is more than twice that. But that's just a typical example of how the media plays it backwards with Apple.

    Now there may be a number of reasons why those 17% left Apple. It may have been an individual problem with a particular device, dissatisfaction with the iPhone or Apple's ecosystem, a matter of getting a cheaper handset from another company, or perhaps they wanted a larger screen. Indeed, one reason suggested for Apple deciding to make larger iPhones in the next cycle — and the rumors mention 4.7-inch and 5.5-inch versions — is to attract customers lost because the screens aren't large enough.

    I suppose there are many possibilities, but these figures aren't terribly new. The movement in Apple's direction has always been way higher than the other way around, but far too many members of the media do not consider context in running stories of this sort. A lost Apple customer gets far more weight than a lost Android, BlackBerry or Windows Phone customer.

    Thus, when a certain high-profile tech columnist switched to Android last year, it was a huge deal. However, the changes forthcoming in iOS 8, which includes full support for third-party keyboards, will evidently cause that columnist to return to the Apple fold. We'll see.

    The fact of the matter, though, is that the claim that the iPhone 5c was unsuccessful is simply not borne out by the facts. Maybe it didn't sell as many units as Apple expected, but that's actually a good thing from a profit and loss standpoint, because it generally means more sales of the 5s. This still doesn't mean the 5c will remain in the product lineup this fall. Apple may have other strategies, but it's also true that this particular iPhone has been more successful than industry analysts claim.

    When it comes to switchers, however, it really doesn't seem that Apple is losing more customers than usual. Without asking detailed questions, and that's not typically being done in these surveys, it's hard to know the reasons for their decision. I also expect that, to many smartphone customers, platform loyalty doesn't mean all that much. Perhaps their use of a smartphone may largely be limited to email and Internet, and they don't have large numbers of apps. So jumping from one platform to another may not be so big an issue. If a dealer has a special price, and they need a smartphone, they'll take what's available.

    You see, we live in a bubble that doesn't always conform to the real world. But the fact is that the iPhone 5c is clearly not a failure, and lots more people move to the iPhone than the other way around. Only in an alternate universe would that be bad news.



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    5 Responses to “The iPhone 5c Myth”

    1. Peter says:

      Thus, when a certain high-profile tech columnist switched to Android last year, it was a huge deal. However, the changes forthcoming in iOS 8, which includes full support for third-party keyboards many of the technologies available in Android, will evidently cause that columnist to return to the Apple fold.

      FTFY.

      Gene Steinberg Reply:

      @Peter, Well, the main issue was the keyboards. But you can argue where the technologies come from. Both Apple and Google, for example, have learned a thing or two from the failed Palm WebOS.

      Peace,
      Gene

    2. […] article makes some good points about the supposed “failure” of iPhone 5C. I’ve maintained […]

    3. Greg says:

      Peter: Yes, many of the features coming to iOS 8 have been available on Android. The implementations, however, are different, and I think the secure handling of the 3rd party extensions in iOS 8 is a better/safer way to manage them. Apple has placed a premium on the security of iOS devices, and this has precluded most of the 3rd party goodies found on Android. Of course it has also precluded the malware as well, which if being honest, you have to admit is a far greater problem on Android than on iOS. It's notable that the well known columnist (AI) that famously/infamously made the switch is on record that he plans to switch back to an iPhone with iOS 8 because the larger screen and typing ease were the primary for his switch. Those being equalized in the upcoming iPhone, he prefers the iOS environment and ecosystem.

      Gene Steinberg Reply:

      @Greg, It's worth reading this piece from Daniel Eran Dilger, a regular on my radio show:

      http://appleinsider.com/articles/14/07/04/inside-app-extensions-apple-incs-new-widgets-keyboards-similar-to-androids-but-secure

      The point here has always been that Apple isn't necessarily first with a new feature, but they do try to get it right.

      Peace,
      Gene

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