iPhone 5C Demand Lower Than Projected: 10 Reasons Why

by Don Reisinger

If the iPhone 5C were a major upgrade over the iPhone 5, Apple would have more of a chance to attract customers. Instead, the company delivered a product that is essentially the same as the iPhone 5, but with different colors. That’s not enough to at least make current iPhone owners want to buy the handset.

There was a belief in Cupertino that vibrant colors would matter to smartphone customers. But it appears that is not such a big sales point. Yes, customers want colors, but as the iPhone 5S’ success has shown, what they really like is elegant options, like the gold iPhone 5S. Apple might have overplayed its hand with the myriad colors for the iPhone 5C.

Before we get too far ahead of ourselves and say for sure that the iPhone 5C is a dud, it’s important to point out that the device has only been on store shelves for a month, and right now, early adopters are buying new Apple handsets. And as history has shown, early adopters tend to be power users, and they gravitate to the high-end devices. That means they’re attracted to the iPhone 5S, not the iPhone 5C.

The iPhone 5C might be a relatively affordable device, coming in at $99 with a two-year contract, but considering the cheapest iPhone 5S costs $199, the difference isn’t so significant that customers on a budget can’t opt for the 16GB iPhone 5S. Recent reports out of China have suggested that the close proximity in price has caused customers to opt for the iPhone 5S. It’s likely that is the case elsewhere around the world.

Although Apple is generating major profits on each iPhone 5C it sells, one of the key metrics Wall Street cares about is ASPs, or average selling prices. By selling more iPhone 5S units, Apple can boost its ASPs and, thus, impress its investors. That means Apple would want to push the iPhone 5S more than the iPhone 5C to keep producing impressive ASPs over the long-term.

Carriers always play a crucial role in pushing mobile devices into the market. If a device isn’t selling all that well, it’ll be pushed aside for a device that is. It’s possible that some carrier outlets are tending to push the iPhone 5S over the iPhone 5C because of the higher profit margin. Look for that to be a nagging issue for the iPhone 5C.

The iPhone 5S is a powerful device, featuring Apple’s A7 processor and the M7 coprocessor designed for fitness and sports apps. The iPhone 5C, meanwhile, takes a back seat in terms of processing power, especially when it’s compared with Android-based competitors like the Samsung Galaxy S 4 or HTC One Max. Power matters to today’s customers. It just may be a fact that iPhone buyers bypass the iPhone 5C because they don’t mind paying a bit extra for the full-featured model.

Let’s not forget that Apple is still selling the iPhone 4S. Sure, the handset is a few years old, but for customers on a budget, getting the device as part of their mobile service contract is an attractive option. What’s more, the iPhone 4S is a great option for prepaid carrier customers and those who use mobile virtual network operators for their services.

Did Apple make a mistake by offering a second-tier smartphone when it wasn’t introducing a major update? If the iPhone 5C was made available when the iPhone 6 hit store shelves, there would have been a larger step for novice users to get the latest and greatest iPhone. Instead, the iPhone 5C is coming out in a year when novices and advanced users, alike, could benefit from the iPhone 5S. That’s an issue.

As noted, many customers have been buying the iPhone 5S in China. But there’s more to that story. According to several reports out of the country, Apple had expected to sell far more iPhone 5C units in China, but instead, the country is opting for the iPhone 5S at an extremely rapid rate. The gold iPhone 5S is especially popular and some had speculated prior to the handset’s launch that Apple’s decision to go gold was partly due to its potential appeal in China.