Apple’s announcement of the iPhone 5c and iPhone 5s last week brought to a close the flood of rumors and speculation that had been building since the day after the iPhone 5 was annouced last year. Let the iPhone 6 rumors begin!… anyway.
The most popular speculation surrounding the launch was the introduction of a “cheap” iPhone which would appeal to a more global audience. Apple has had a problem on the worldwide stage for some time now. Emerging markets around the world have been adopting smartphones at a previously unprecedented rate and Apple’s audience has grown, but not nearly at the same rate as the global smartphone using population, causing their overall presence to decrease.
I don’t know about you, but I was very surprised to see numbers like that. I mean, it’s the iPhone for Pete’s sake. They’re everywhere! Suddenly, Obi Wan emerges and says “Everywhere in America, my narrow minded patawan.” “Well, I guess but..” “Shut up and go kill your dad and kiss your sister.” “Um ok…”
So then this 5c thing is going to be a big deal right? In the past, Apple’s business model has always been to take last year’s really expensive iPhone, knock off a hundred bucks, and continue to produce them as the “cheap” alternative. This was actually a brilliant strategy. Apple hasn’t exactly been a slouch in the phone department after all. Their phones are generally really good and really compelling pretty darn future-proof. And just because it’s last year’s top of the line, doesn’t mean it doesn’t compete this year as well.
Plus, if a consumer goes out and gets an iPhone 5, or even a 4S, there’s nothing to say when they bought that. Did they buy it when it first came out? Did they buy it after the price drop? Who knows, and most of you are probably saying “who cares?” and you’re not wrong. Some people will care though. They’re shallow and stupid, but they’ll care. It’s a minor point, but worth mentioning so don’t harp.
But the 5c changes all that. The 5c is a brand new product designed to be of lesser value. Why? Because of plastic? Because of a lack of fingerprint scanner? Sure, maybe. It’s still last year’s technology, but it’s got a new and pretty case on it. That rankles. The consumer asks, “It’s new, why shouldn’t it be just as good?” And what’s more, it’s not that much cheaper. It’s still the same price as what an iPhone 5 would have been, only without the premium materials.
And it’s not going to address Apple’s biggest issue – the aforementioned global market. On a fundamental level, Apple changed their strategy not one iota. They are still producing last year’s phone. Sure, they’re slapping a coat of paint on it, but it’s still the same phone. Nothing has changed, dear investors. Apple is trying to disguise the fact (and poorly at that) that they have learned nothing in the two years its global market share has been falling.
Maybe they want to focus on dominating the US market? It’s not a bad idea. America has proven that they’ll wait in line for days for something they haven’t even seen yet. And after all, just because Apple isn’t doing well in the global smartphone market, doesn’t mean they’re not doing well in the high-end global smartphone market. Sure you can have your Lumia 520’s from the home shopping network, but discerning smartphone customers always choose iPhones. Now if you’ll excuse me, I have to go club a baby seal.
I’m not sure how Apple is faring in the high-end market. I haven’t been able to find numbers for that, probably because it’s a fairly subjective field. What exactly is, “high end?” It’s anyone’s guess. But the “eye test” says Apple’s not even doing very well there. Samsung is becoming the king of smartphones great and small. Other OEM’s are rightly looking to emerging markets with $80 smartphones designed to at least get a foot in the door. And there’s Apple, right in the middle of a major identity crisis, or at least a crippling case of denial.
Apple needs to figure out what it’s plan is. Maybe the plan is much further reaching than we can see here. Maybe this is step one in a multi-step process. This year we introduce two new phones. Next year we actually make a cheap iPhone. Then we make a phablet, etc, etc. And if that’s the case, more power to them. We’ll all just hope that they can implement their plan fast enough to avoid becoming a small fish in the big pond that it used to call home.