Apparently, as our news cyborg Stephen Schenck explained earlier this week, Apple has trouble keeping a lid on insider info these days. Among the iPad and iPhone 5S rumors, talk of a much more affordable iPhone has spread across the Internet for months on end. And according to the increasing number of leaks and rumors, this cheaper model iPhone will be known as the iPhone 5C.
Contrary to our knee-jerk reaction to assume the “C” in the moniker equates to “cheap,” it’s more likely the lettering has more to do with the color options. The purported housing of the 5C has been viewed in several different colors, while rumors point to there being a broad array of color choices at launch.
What will the low-end iPhone model entail? We don’t know for sure – we can only make rough guesses based on the limited information we have. But that’s not the point. The point is: no one cares, because this phone won’t be targeted at people who care what’s inside, but care more about what it looks like, the name, the brand, and the apps and games that come with Apple’s vast ecosystem.
No less, we’re left wondering one thing: will anyone actually care about the iPhone 5C? Does a cheaper model iPhone have a place in this world?
My immediate reaction to the initial rumors was plainly “No.” Here in the States, there is very little reason anyone should want a cheaper iPhone. The new models always start at $199 with a two-year agreement, and $649 no-contract. Either way, the models increase in $100 increments for additional storage. And once the new model comes out, the previous year’s model drops by $100, and the two-year-old iPhone either becomes free or $1 with a two-year agreement.
For all intents and purposes, older models of the iPhone have always served as the low-end models. The specifications, while not all-important, are dated, the device is cheaper, and the experience isn’t all that worse. It’s an affordable and smart way to get an iPhone without breaking the bank.
So where would a cheaper model iPhone fit in?
In the US, it would cannibalize the sales of older model iPhones. Logistically, that could be a bad move for Apple. What would it and, likewise, wireless providers do with all the overstock of old iPhones once the new one and a cheaper model comes out?
But far too often, we Americans forget that the universe does not revolve around us, and that we have a … unique (read: idiotic) way of doing things when it comes to mobile. We’re one of the few markets in the world that relish subsidization. Okay, we tech people don’t, but the general populace does, mainly due to misinformation and … “free” (or cheaper) phones, even if it means their monthly bill is higher.
In other areas of the world, a cheaper iPhone likely makes a little more sense. Where the previous iPhone model’s retail value may only drop $100, a brand new model that costs only $300 or $350 (the purported no-contract price) fits perfectly at the lower end of that spectrum.
The latest model iPhone will continue to cost $649; last year’s model will likely continue to drop to $549; the two-year-old model will retail for $449; and assuming the 5C rumors are correct, it could retail for $349. In essence, Apple will be able to capture more sales, especially in emerging markets.
But the more I think about the color options and see the chassis of this more affordable iPhone 5C, the more I imagine American teens whipping out green, blue, pink, yellow, red, and other colorful iPhones. Instead of getting their child an iPod Touch for Christmas (or some other holiday), parents will opt for the free iPhone on contract that they can add to their existing plan for $40 per month. And the teens are happy because they get a new iPhone, albeit the cheap model.
With devices like the customizable Moto X – which is also meant to appeal to a younger crowd more interested in the fashion statement associated with a smartphone than what it offers – selling for $199 on-contract, the iPhone 5C would have a nice foothold in the market. In fact, it could (and likely would) undercut all the other cheap Android and Windows Phone smartphones available, despite its impracticality.
Think about it. Will a parent looking for a first smartphone for their child go with a $1 iPhone 5C, HTC First, Windows Phone 8X, or some other comparable, cheap phone? What about the $199 Moto X? I’m willing to bet that nine out of 10 parents, if not more, will opt for the iPhone 5C.
So does the iPhone 5C have a place in this world? Absolutely. Will it matter in the end? Probably. It will be capturing a lively market that it has been practically absent in since the beginning. And more competition in the low-end space will only force the competition to bring the prices down and the quality up. It will ultimately be a win for everyone.