The iPhone 5c is performing far below expectations.
- Apple has been keeping it quiet but it is patently clear that the iPhone 5c is simply not selling in anything like the kind of volumes that Apple was hoping for.
- The Chinese are reporting that manufacturing orders are being cut in half from an already tiny 300,000 units to 150,000 units.
- It is one month after launch and everyone I know of is sitting on inventory and Apple is even taking some devices back from operators and distributers.
- Radio Free Mobile research which shows that most operators have phones available and Apple’s website which shows devices available for next day shipping.
- Fortunately for Apple, the 800 pound Gorilla iPhone 5s is out of stock everywhere and operators and distributors are reporting robust demand for the device.
- This means that while volumes in calendar Q4 may come in a tiny bit light, there will be a corresponding lift to ASPs meaning that the impact on revenue is likely to be negligible.
- Hence, I believe that Apple’s surprisingly strong 9m unit shipments in the first weekend was mostly due to China which remains a relatively new market for Apple.
- This just serves to underline what Apple always says: “We don’t do cheap well” and could easily dissuade Apple from other forays into the cheaper end of its markets.
- I think users are also attaching a negative cache to the device not wanting to be seen as not able to afford a proper iPhone.
- This is great news for the Android camp and for Microsoft as it is increasingly looking like that they will not have to deal with Apple encroaching further into their territory.
- Radio Free Mobile continues think that Microsoft and Yahoo! are the two companies to look at when considering the mobile ecosystem.
- At the same time, the undifferentiated Android vendors such as LGE, Motorola, ZTE, Huawei and so on look set to continue to struggle to keep their heads above water.
Blog Comments
Tim Nash
October 11, 2013 at 11:55 am
A real question for the 5c is how much has it increased the iPhone market over the sales of the 4s last year?
Canaccord’s US research suggests the 5c is outselling the Galaxy G4 at AT&T and Sprint and behind it at Verizon and T-Mobile. According to Ben Bajarin; before the release of the 5s/5c, Apple already had 64% of the over $400 cellphone market in the US. Recent figures from Kantar and ComScore showed increasing iPhone marketshare before the 5s/5c release too.
Assuming the Chines production report is true, what we don’t know yet is what is happening with the 5c production line. If Apple has converted a number of shifts to 5s production so that it can better deal with the backlog and an initial order from China Mobile, so much the better.
windsorr
October 12, 2013 at 12:57 pm
Given that everyone has stock of the 5c, the real headway is being made by the 5s. The China report fits exactly what I have heard from at least 4 separate sources of companies who are selling the iPhone 5C. Non one seems to want it,
Tim Nash
October 13, 2013 at 1:07 pm
From a conversation a few years ago with the Manager of a major phone outlet, margins on iPhones are tight so resellers only make money from the phone plans and accessories. As the iPhone ASP has stayed fairly constant, Apple’s margins for resellers haven’t changed.
Other cellphone companies give fatter margins and pay a direct commission to the salesman – Samsung’s commissions are larger, hence their large marketing expenses and rise to the top in unit sales. So if Canaccords US research is accurate, the 5c is displacing Samsung (and other Android) sales and hence reseller margins and sales commissions. This could be a major reason why the noise is no-one wants it.
So IMO, a good question to ask is how do sales of the 5c/4s this year compare to sales of the 4s/4 last year? If they are up, Apple is building out its user base.
windsorr
October 15, 2013 at 9:51 am
Good idea…will look into it!
tatilsever
October 11, 2013 at 4:51 pm
> “I suspect that a large part of the reason for the failure of the iPhone 5c is the fact that it has a lower specification than the iPhone 4s but incredibly, a higher price.”
Eh??? No, it does not have lower specs. It is almost the same as iP5. It’s got multi-band LTE (better than 5 and 4S did not have LTE at all), taller screen, better WiFi+BT, better camera, faster CPU/GPU than 4S. You need a new theory. 🙂
windsorr
October 12, 2013 at 12:58 pm
That is correct. I made a mistake….I don’t know why I got it into my head that the spec was lower….will correct..thanks…