Is Apple Cutting iPhone 5C Price a Sign of Desperation?

The iPhone 5C.
The iPhone 5C.

Will lowering the iPhone 5C’s price make it more popular?

Apple certainly hopes so.

The company has rolled out an 8GB version of the plastic-bodied smartphone, accompanying that reduction in onboard memory with a lower price. The “new” iPhone 5C is available in China, Australia, and major markets in Europe (the U.K., France, and Germany) but hasn’t made the jump to the United States. On its Website, Apple also revealed that the fourth-generation iPad is now its “budget” tablet, replacing the much older iPad 2.

Apple rolled out the iPhone 5C in 2013 as a lower-cost alternative to the iPhone 5S, its latest “hero” smartphone. At the time, pundits and analysts widely assumed that the plastic iPhone represented the company’s attempt to expand into the mid-market, which is dominated by Android-based devices from Samsung and other manufacturers. In a March 18 statement to Re/code concerning the iPhone 5C’s 8GB edition, an Apple representative confirmed that thinking: “The mid-tier iPhone segment is growing year-over-year and the 8GB model provides a more affordable option for markets where LTE is becoming more established.”

But is the iPhone 5C a strong contender in the mid-tier segment? Soon after the device’s launch, reports suggested that the more-expensive iPhone 5S was outselling its brightly colored counterpart by a significant margin, with budget customers perhaps dismayed over the iPhone 5C’s relatively high sticker price. By mid-October, a report in The Wall Street Journal suggested that Apple had slowed production of the iPhone 5C by double-digit percentages, even as retailers in China and the United States slashed the phone’s price.

If those reports were accurate, and if the iPhone 5C sales failed to pick up in the interim, then Apple’s latest price cuts could be viewed as an attempt to excite an anemic market rather than accelerate growth. Given its rivals’ success in the midmarket, Apple has little choice but to do all it can to make the iPhone 5C a success.

 

Image: Apple

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