It’s Not About the Price, Stupid!
I was very wrong about the iPhone 5C.
For years and years, many people have been expecting Apple to come out with a lower priced iPhone. They’ve always done this with their other product lines. They did this with the iPod, they’ve just done it with the iPad last year. So many technology pundits have been saying Apple needs to release a cheaper iPhone or they are doomed.
This is from The Wall Street Journal in February 2011, approximately two and a half years before the iPhone 5C is out:
Apple Inc. is working on the first of a new line of less-expensive iPhones and an overhaul of software services for the devices, people familiar with the matter said, moving to accelerate sales of its smartphones amid growing competition.
Apple is preparing to roll out a series of lower-priced iPhones to compete with other smartphones on the market. The new models will run about half the cost of existing iPhones.
One of the people, who saw a prototype of the phone late last year, said it is intended for sale alongside Apple’s existing line. The new device would be about half the size of the iPhone 4, which is the current model.
Key words: less-expensive iPhone, overhaul of software and services, half the cost of existing iPhone, half the size of the iPhone 4. Today, two and a half years after that article is written, we know that Apple released a lower cost iPhone: iPhone 5C. It’s not half the size of the iPhone 4, and it runs on the same software and services that the other iPhone runs on.
But here’s the thing: Apple has been offering cheaper iPhones since 2009. They have always used last year’s model as the cheaper offering. Since they released iPhone 4S, they kept last year’s model and the year before’s model for free on a contract. They’ve only stopped selling the iPhone 3GS last year, September 2012 when they launched the iPhone 5.
So as Gruber put it on his piece today: the iPhone 5C has nothing to do with price. This is the year where they feel like they can keep last year’s internal, work on the housing, and advertise it as a new phone. But iPhone 5C is not a cheap product, it’s a premium product. To some people, it might even look better than any other iPhone that Apple has released previously. The fact that Apple is going to keep selling the iPhone 4S also shows that iPhone 5C is not a cheap product.
Some people mistake this move as the “Apple is not innovating anymore” move. No. iPhone 5C is there for the mass market, cheaper than previous new iPhone offerings. The iPhone 5S is there as the pro offering. Now the iPhone product line is the same as the iPod, iPad, and Mac product line. It’s a multi tiered product line. In fact, I dare to say that this is one of the boldest S upgrade ever done by Apple. iPhone 5S is a much bigger upgrade than iPhone 3GS and iPhone 4S were. I also think that iPhone 5S is very close to destroying the pocket camera market.
Eventually, as with other product offerings, the pro features will trickle down to the consumer line. In a few years, all iPhones will be running on a 64-bit SoC and has fingerprint scanners. But for now, it’ll only be on the pro line, the iPhone 5S.
I think iPhone 5S’s selling points are very interesting and compelling. Touch ID sensor, much better camera, and way faster SoC. On the touch ID sensor: if you’ve bought a Windows laptop between 2002 and 2008, you might have bought one of those that comes with a fingerprint scanner. The novelty wears off as the success rate of scanning your finger was very low. It was much faster to type your password. It’s very interesting that Apple is once again using a not-new hardware paired with their software to create a better technology.