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Interesting analysis by Dediu as usual (I'm a big fan and listen to his podcast regularly). I think a lot of people (including Horace and yours truly) are surpr

Interesting analysis by Dediu as usual (I'm a big fan and listen to his podcast regularly). I think a lot of people (including Horace and yours truly) are surprised by the 5C pricing strategy -- it's not 5C(heap) but 5C(olor). I just looked at real world photos on Ars of the new models and from my POV the 5C models look like they are designed for kids. (A matter of taste, of course.) If Apple cut the price by another $100 they might make sense as a pricepoint but at only $100 less than 5S it seems crazy to me. It's notable there's no black (or 'slate') 5C. I guess if one wants a more 'dignified' (again, a matter of taste) one has to go 5S. I commend to all the interesting Steve Jobs quote found at the end of the comment by markwilcox: "What ruined Apple was not growth … They got very greedy … Instead of following the original trajectory of the original vision, which was to make the thing an appliance and get this out there to as many people as possible … they went for profits. They made outlandish profits for about four years. What this cost them was their future. What they should have been doing is making rational profits and going for market share." - Steve Jobs. As a long-time Apple fan and former shareholder I'll be very interested to see how this pans out.

kunil 13y ago
I have 0 knowledge in business world and how things work but wasn't Jobs basically Apple itself? Even if he does not have single-handedly vote percentage to make things reality for Apple, his reputation is not enough to force things?
- zeckalpha 13y ago
  This quote is about the late 1980's, after Jobs had been forced out of Apple.
juandopazo 13y ago
US$100 is a lot of money for a lot of people in other markets.
- lucian1900 13y ago
  The difference is still minuscule. £549 vs £469 is insignificant, especially when you can get a Nexus 4 for twice that difference (£159).
  - bosie 13y ago
    where can you snag a nexus 4 for 159 pounds?
    - OrsenPike 13y ago
      Google cut the price a couple of weeks back. The 8GB N4 is £159. You can grab it from here https://play.google.com/store/devices/details/Nexus_4_8_GB?id=nexus_4_8gb https://play.google.com/store/devices/details/Nexus_4_8_GB?i...
    - NickPollard 13y ago
      On Google Play last week (the 8gb version), it has now sold out. The 16gb version is available for £199, which I bought two weeks ago and am thrilled with.
      - JimmaDaRustla 13y ago
        What you get for the price, best deal there is! Months ago, this phone was being offered for free on a 2 year contract. I paid $50 for mine 6 months ago. Only thing I'm disappointed in is the camera, but that's why I have my Canon.
- VLM 13y ago
  On the other hand doesn't the stereotypical iphone owner in the USA currently write a check well over $100 per month? I'm not talking about "extreme measures" but the more typical grannie walks in off the street and walks out with a phone? This seems to be a problem. Hmm buy the inferior product, or spend a mere 3 weeks service to buy the top of the line. Duh I'll buy the top of the line. If I wanted to save money I'd just get an android phone from Republic Wireless for $19 like VLM did on Hacker News (I'm a happy customer). Therefore since I'm already contemplating the 2nd most expensive option out there, and possibly the 2nd best option out there, may as well pay a tiny bit more for the best one. If I want to blow $30 on an expensive bottle of wine, there's no way in hell I'm paying $31 for an inferior bottle sitting next to a superior $32 bottle. If I wanted to save money I wouldn't participate in that market anyway. And that is the marketing plan I think they're using. I don't think they'll sell any of the cheaper ones.
threeseed 13y ago
One of the things people always forget is Apple's brand. The best place to see this exemplified is Ginza, Tokyo where the store is right next to Louis Vuitton, Prada, Chanel etc. It sees itself as a premium, fashionable brand. Pricing it low would have the effect of short term financial gain but at the expense of commoditising the iPhone's brand. Which would make people far less willing to spend the extra money on the 5S (which has the larger margins).
- yadoga 13y ago
  Actually the '5C' is supposed to have the higher margins. Apple are pricing it more or less the same as the original '5' while benefiting from their integrated supply chain with known parts and on top, replacing the aluminum case with supposedly cheaper plastic parts. Albeit very high-grade polycarbonate, comparable to the Lumia line from Nokia. The '5S' has the much more expensive exterior parts, plus new chip designs inside as well as bigger camera sensor and TouchID parts. The 'C' will be raking in the profits for Apple.
  - iaskwhy 13y ago
    That's one of the most interesting takes from this. Everyone was claiming cheap and they went for margin instead.
    - criley2 13y ago
      Apple always goes on margin. The extra memory versions of the iPhone are all margin. When you get to the $850 iPhone with 64GB of memory, the profit margin is generally around 75%. As in, it costs them $215 to make a $850 device. Apple rarely dips below 40% margin on it's products it seems. Now that Apple has over $100,000,000,000.00 in it's little hedge fund and has become the largest fund in the world (iirc), I've begun to look at the iPhone as the worlds most successful hedge fund capital raising scheme.
      - iaskwhy 13y ago
        "Always" might be too extreme given the iPad Mini. Also, I would consider an upsell of the same model a different thing from the base price of different models.
saturdaysaint 13y ago
Notice that Jobs didn't say "companies should always make rational profits and go for market share". Under Jobs, the first several generations of iPhone were exceptional for how much market share they left on the table by being exclusive to a single carrier in many major markets.
kayoone 13y ago
He didnt really follow the essence of that quote with NeXT then, did he ? Which means, going for market share makes sense for some companies, but not for all of them. Imo competing in the lower end of the market isnt going to do them nor their brand much good. Their focus on the premium segment seems to still be the right directio to me.
coldtea 13y ago
>I just looked at real world photos on Ars of the new models and from my POV the 5C models look like they are designed for kids. That's a western male perspective. In Asia (including India), adults will jump to get those colors. (And women in the West too).
- plinkplonk 13y ago
  "In Asia (including India) adults will jump to get those colors" no they won't (due disclosure: Indian living in India). They might 'jump to get' good value for money. The IPhones have never been seen as good value for money in the Indian market, and have truly miniscule market share. Bright colors won't help. These kind of generalizations - emerging market customers are fools who can be bamboozled by bright colored cases and very expensive phones that are one generation (or more) behind the truly cutting edge phones - shows Apple is clueless about how to succeed in emerging markets. Which is ok - they can stick to America/Europe and make tonnes of money. We'll see in a year or two if they can crack the Chinese markets, with these plastic phones. I doubt it somehow.
  - 001sky 13y ago
    It is true that the color palletes of attractive hues vary by region. In part, this has to do with skin-tone. You can verify this by looking at Make-up for women (who understand this stuff), and compare trends on a global level. This is not withstanding the value for money argument, which is a valid (but disctinct) point.
    - plinkplonk 13y ago
      All true. I was just pushing back against the idea that Indians will "jump to get" brightly colored cellphones. Color has next to no impact on the Indian cell phone (vs say cosmetics) market, which is very feature-comparison and value for money driven.
- diydsp 13y ago
  I think you think you called out sexism, but in actually, you have perpetuated it. PP shared his/her own opinion with no attempt or claim made to speak for other people. Your contribution was to declare which opinions belong to each sexist grouping you architected. You have said, "Your opinion is a western male one," but I doubt you know PP's origin, so you are shooting in the dark. You have said, "Asians are like _this_. Women are like _that_. Men are like _this_. Indians are _that_." That is prejudicial, and even worse, normative, behavior by you, compelling others to conform. If I were an Asian adult who didn't like the colors, your comments might make me feel hurt right now, whereas PP's comment was acceptable.
pohl 13y ago
If Apple cut the price by another $100 they might make sense as a pricepoint but at only $100 less than 5S it seems crazy to me Conjecture: these will be the free-with-contract phones next year, and something else will occupy the $100 slot.
- baddox 13y ago
  Sure, but that's still not a significant departure from Apple's current tiered pricing model.
baddox 13y ago
> I just looked at real world photos on Ars of the new models and from my POV the 5C models look like they are designed for kids. (A matter of taste, of course.) If Apple cut the price by another $100 they might make sense as a pricepoint but at only $100 less than 5S it seems crazy to me. I genuinely think this opinion might be the result of a filter bubble or its "real life" equivalent. I don't care for the bright colors personally, but I think the white 5c looks excellent (a black one would be even better). I still prefer the metal casing (plus the tech specs are important to me), so I'll choose the 5s if I decide to upgrade, but I can absolutely understand why a huge portion of potential buyers would prefer the plastic case, especially people who aren't particularly concerned with having the most blazing new chip or the fingerprint sensor. In fact, even among gadget geeks, I can see many choosing the plastic design specifically because it is plastic. I have heard a lot of disappointment about the fragility of metal iPhones since the debut of the iPhone 4.

kunil 13y ago

I have 0 knowledge in business world and how things work but wasn't Jobs basically Apple itself? Even if he does not have single-handedly vote percentage to make things reality for Apple, his reputation is not enough to force things?

zeckalpha 13y ago
This quote is about the late 1980's, after Jobs had been forced out of Apple.

juandopazo 13y ago

US$100 is a lot of money for a lot of people in other markets.

lucian1900 13y ago
The difference is still minuscule. £549 vs £469 is insignificant, especially when you can get a Nexus 4 for twice that difference (£159).
- bosie 13y ago
  where can you snag a nexus 4 for 159 pounds?
  - OrsenPike 13y ago
    Google cut the price a couple of weeks back. The 8GB N4 is £159. You can grab it from here https://play.google.com/store/devices/details/Nexus_4_8_GB?id=nexus_4_8gb https://play.google.com/store/devices/details/Nexus_4_8_GB?i...
  - NickPollard 13y ago
    On Google Play last week (the 8gb version), it has now sold out. The 16gb version is available for £199, which I bought two weeks ago and am thrilled with.
    - JimmaDaRustla 13y ago
      What you get for the price, best deal there is! Months ago, this phone was being offered for free on a 2 year contract. I paid $50 for mine 6 months ago. Only thing I'm disappointed in is the camera, but that's why I have my Canon.
VLM 13y ago
On the other hand doesn't the stereotypical iphone owner in the USA currently write a check well over $100 per month? I'm not talking about "extreme measures" but the more typical grannie walks in off the street and walks out with a phone? This seems to be a problem. Hmm buy the inferior product, or spend a mere 3 weeks service to buy the top of the line. Duh I'll buy the top of the line. If I wanted to save money I'd just get an android phone from Republic Wireless for $19 like VLM did on Hacker News (I'm a happy customer). Therefore since I'm already contemplating the 2nd most expensive option out there, and possibly the 2nd best option out there, may as well pay a tiny bit more for the best one. If I want to blow $30 on an expensive bottle of wine, there's no way in hell I'm paying $31 for an inferior bottle sitting next to a superior $32 bottle. If I wanted to save money I wouldn't participate in that market anyway. And that is the marketing plan I think they're using. I don't think they'll sell any of the cheaper ones.

threeseed 13y ago

One of the things people always forget is Apple's brand. The best place to see this exemplified is Ginza, Tokyo where the store is right next to Louis Vuitton, Prada, Chanel etc. It sees itself as a premium, fashionable brand. Pricing it low would have the effect of short term financial gain but at the expense of commoditising the iPhone's brand. Which would make people far less willing to spend the extra money on the 5S (which has the larger margins).

yadoga 13y ago
Actually the '5C' is supposed to have the higher margins. Apple are pricing it more or less the same as the original '5' while benefiting from their integrated supply chain with known parts and on top, replacing the aluminum case with supposedly cheaper plastic parts. Albeit very high-grade polycarbonate, comparable to the Lumia line from Nokia. The '5S' has the much more expensive exterior parts, plus new chip designs inside as well as bigger camera sensor and TouchID parts. The 'C' will be raking in the profits for Apple.
- iaskwhy 13y ago
  That's one of the most interesting takes from this. Everyone was claiming cheap and they went for margin instead.
  - criley2 13y ago
    Apple always goes on margin. The extra memory versions of the iPhone are all margin. When you get to the $850 iPhone with 64GB of memory, the profit margin is generally around 75%. As in, it costs them $215 to make a $850 device. Apple rarely dips below 40% margin on it's products it seems. Now that Apple has over $100,000,000,000.00 in it's little hedge fund and has become the largest fund in the world (iirc), I've begun to look at the iPhone as the worlds most successful hedge fund capital raising scheme.
    - iaskwhy 13y ago
      "Always" might be too extreme given the iPad Mini. Also, I would consider an upsell of the same model a different thing from the base price of different models.

saturdaysaint 13y ago

Notice that Jobs didn't say "companies should always make rational profits and go for market share". Under Jobs, the first several generations of iPhone were exceptional for how much market share they left on the table by being exclusive to a single carrier in many major markets.

kayoone 13y ago

He didnt really follow the essence of that quote with NeXT then, did he ? Which means, going for market share makes sense for some companies, but not for all of them. Imo competing in the lower end of the market isnt going to do them nor their brand much good. Their focus on the premium segment seems to still be the right directio to me.

coldtea 13y ago

>I just looked at real world photos on Ars of the new models and from my POV the 5C models look like they are designed for kids. That's a western male perspective. In Asia (including India), adults will jump to get those colors. (And women in the West too).

plinkplonk 13y ago
"In Asia (including India) adults will jump to get those colors" no they won't (due disclosure: Indian living in India). They might 'jump to get' good value for money. The IPhones have never been seen as good value for money in the Indian market, and have truly miniscule market share. Bright colors won't help. These kind of generalizations - emerging market customers are fools who can be bamboozled by bright colored cases and very expensive phones that are one generation (or more) behind the truly cutting edge phones - shows Apple is clueless about how to succeed in emerging markets. Which is ok - they can stick to America/Europe and make tonnes of money. We'll see in a year or two if they can crack the Chinese markets, with these plastic phones. I doubt it somehow.
- 001sky 13y ago
  It is true that the color palletes of attractive hues vary by region. In part, this has to do with skin-tone. You can verify this by looking at Make-up for women (who understand this stuff), and compare trends on a global level. This is not withstanding the value for money argument, which is a valid (but disctinct) point.
  - plinkplonk 13y ago
    All true. I was just pushing back against the idea that Indians will "jump to get" brightly colored cellphones. Color has next to no impact on the Indian cell phone (vs say cosmetics) market, which is very feature-comparison and value for money driven.
diydsp 13y ago
I think you think you called out sexism, but in actually, you have perpetuated it. PP shared his/her own opinion with no attempt or claim made to speak for other people. Your contribution was to declare which opinions belong to each sexist grouping you architected. You have said, "Your opinion is a western male one," but I doubt you know PP's origin, so you are shooting in the dark. You have said, "Asians are like _this_. Women are like _that_. Men are like _this_. Indians are _that_." That is prejudicial, and even worse, normative, behavior by you, compelling others to conform. If I were an Asian adult who didn't like the colors, your comments might make me feel hurt right now, whereas PP's comment was acceptable.

pohl 13y ago

If Apple cut the price by another $100 they might make sense as a pricepoint but at only $100 less than 5S it seems crazy to me Conjecture: these will be the free-with-contract phones next year, and something else will occupy the $100 slot.

baddox 13y ago
Sure, but that's still not a significant departure from Apple's current tiered pricing model.

baddox 13y ago

> I just looked at real world photos on Ars of the new models and from my POV the 5C models look like they are designed for kids. (A matter of taste, of course.) If Apple cut the price by another $100 they might make sense as a pricepoint but at only $100 less than 5S it seems crazy to me. I genuinely think this opinion might be the result of a filter bubble or its "real life" equivalent. I don't care for the bright colors personally, but I think the white 5c looks excellent (a black one would be even better). I still prefer the metal casing (plus the tech specs are important to me), so I'll choose the 5s if I decide to upgrade, but I can absolutely understand why a huge portion of potential buyers would prefer the plastic case, especially people who aren't particularly concerned with having the most blazing new chip or the fingerprint sensor. In fact, even among gadget geeks, I can see many choosing the plastic design specifically because it is plastic. I have heard a lot of disappointment about the fragility of metal iPhones since the debut of the iPhone 4.