For emerging markets, the 'c' in iPhone 5c might stand for 'colorful', but certainly not for 'cheap'
Industry experts are not very optimistic about iPhone 5C doing well in the emerging markets due to its price point.
The iPhone 5C is priced at $549 (Dh2,019) for 16GB and $649 for 32GB for end users. It is priced at $99 for 16GB and $199 for 32GB for a two-year contract in the US.
“On a contract basis, it is cheaper. On non-contract basis, the iPhone 5C isn’t exactly cheap, particularly in countries where the majority of users don’t have contracts,” Hamza Saleem, senior research analyst at International Data Corporation (IDC), a research firm, told Gulf News.
With this price point, he said it is difficult for Apple to compete in the emerging markets. Prices may wary in some regions like China, India and other emerging markets. Apple will find it tough to compete with the Chinese companies in China itself.
It looks like Apple is targeting the mid-range segment with “5C rather than the low-end segment as Samsung is very strong in the mid-range segment.”
He said 5C has the same body, same processor and same retina display as the iPhone 5, and the only difference is the polycarbonate shell instead of the metal shell on iPhone 5.
According to Francis Sideco, director for consumer electronics and communications technologies at research firm IHS, at an unsubsidised cost of $549, the iPhone 5C remains at the same price point as the existing mid-range model in Apple’s smartphone line, the iPhone 4S.
“In light of this pricing, the 5C appears to be a mid-range product that cannot significantly expand the available market for the iPhone line to lower-income buyers. As a result, the arrival of the 5C will not spur a major increase in iPhone sales in the second half of 2013 compared to previous expectations,” he said in a emailed statement.
“Apple is going to make more money from 5C and less money from 5S. The 5C is the same phone as the iPhone 5 and they are also discontinuing iPhone 5 to boost 5C sales,” Saleem said.
In emerging markets, he said that consumers are bothered more about the features and not about the brand. In Africa, Tekno will become more popular as it has features and the price point with Android on it. “Prices for 5C should have been between $300 and $400. Since the prices are more than this, Apple is going to mess it up,” Saleem said.
Sideco said that if Apple had hit a $350 to $400 price range for the iPhone 5C, the company might have had a chance to expand its smartphone shipments “beyond what we originally expected in the second half. Even at a subsidised price of $99 with a two-year contract, the 5C will not spur sales because it does not materially expand Apple’s addressable market past the level we had already taken into account.”