iPhone 5C boxes (Martin Hajek 002)

Are you ready for a break from the usual headlines concerning Apple’s likely introduction of a low-cost iPhone? The perception of low-cost smartphones as some technological game of limbo between the iPhone maker and Google’s Android is all wrong, says one analyst. Those thinking Apple needs to join the race to the bottom misunderstand that hardware price is not the overriding factor for every consumer shopping for a handset…

“The fallacy those who think price is all that matters fall into believing that all consumers value the same thing,” writes Creative Strategies analyst Ben Bajarin.

For Apple, an entry-level iPhone is not designed to scoop up customers at the very bottom, where price is all-important and likely would never spend much for an app, a video or another iOS device.

“Worst part is,” writes Apple pundit John Gruber, “you just know on day one, after it’s announced and it isn’t priced at $99, the usual clowns will say the iPhone 5C is doomed and Apple out of touch because ‘Hey, that’s not cheap!’”

“I don’t expect this phone to be cheap in any way,” Apple blogger and guitarist Jim Dalrymple opines over at The Loop.

Instead, an entry-level iPhone is just that: a way for people to enter the the Apple ecosystem where you buy an inexpensive mid-range phone off-contract, move on to buy a number of apps for the device, go on to sign up at iTunes to grab some tunes or videos and then head to the Apple Store to pick up a MacBook or Apple TV.

A gateway drug, indeed.

Tim Cook unveils iPhone 5C (Martin Hajek 002)

We can’t use the hardware model to judge Apple.

For hardware makers, you judge an HP or Dell by how many PCs are sold. For Apple, the iPhone or iPad are just entry points to an ecosystem comprised of hardware, software and services.

The second error made in viewing the need for an inexpensive iPhone is to see the battle between Apple and Google as one where the Internet giant is betting the farm on Android success.

But as Bajarin notes, an entry-level iPhone profits Google, as well as Apple.

As much as Apple will benefit from getting new customers with an entry-level iPhone that benefits their ecosystem so will Google. We know Google makes more on iOS than Android and interestingly an entry-level iPhone will likely help Google’s bottom line as well.

Echoing our sentiment that we miss the big picture by just chasing unit sales and market share, Apple observer Steve Cheney points out that while Android seems to be widening its lead over iOS worldwide, Google’s mobile software may have peaked in the US.

iPhone 5C (pink, front, Martin Hajek 001)

The introduction of the entry-level iPhone 5C may throw a roadblock into Android elsewhere, where inexpensive smartphones are fueling Samsung and others.

For all those who wondered what took Apple so long to get to the inexpensive iPhone idea, Rene Ritchie at iMore claims Apple had the idea for an entry-level iPhone back in 2009 or 2010.

However, “the economics and conditions back then made them go with – and stick with – the older-model-at-reduced-price model instead.” In other words, the iPhone 4 and iPhone 4S, which became the entry-level iPhones.

In an interesting note, Ritchie sees the iPhone 5C as serving the purpose of the aging iPod touch – to introduce new customers to the Apple ecosystem.

iPhone 5C renders via Martin Hajek.

  • Markus Hudobnik

    I still don’t see the point. Especially of the device is not going to be $100

    • Alex Marwaha

      if it was priced at 100, you would get no camera, a 1 inch display and a big battery taped to the back.

      • Markus Hudobnik

        I mean $100 with a two year plan

      • The point of this phone is to be sold contract-free and priced reasonably because phones in many countries other than the US are sold unsubsidized and often separate of wireless contracts. The contract-free $450 iPhone 4 just doesn’t cut it, especially with 2x higher price in countries like Brazil and India.

      • sadaN

        Im Brazilian, tell me about that 🙁

      • Qiren_94

        The world doesn’t just revolve around the US, you know?

  • Boss

    I think it will cost the same at the iPhone 4S and they’ll just stop making the 3.5 inch iDevices

    • KraKsX

      Right, At this point it should not be cost effective to continue making 3.5 screens.

      • KP1877

        Look who I found

      • KraKsX

        Im always around 😉

      • Yes but, at some point the iPhone 5 will be the new “iPhone 4S” and what they gonna do? Selling the iPhone 5 and 5C at the same price…?

      • Howard

        I think the idea is to get rid of having old devices on sale. So they’ll sell the 5S at the top, then the 5C around the current 4/4S price point, so they’d just have the two.

      • Boss

        iPhone 5S – $649
        iPhone 5 – $549
        iPhone 5C – $449

      • Carlos Cedeno

        I’m right there with you but I feel the 5c would basically be a 4s which would probably be 450 but because of the the plastic I bet it’ll go down to 400 or even 350 range.

  • Willie

    Why would apple release a cheap iPhone, when the prices of their old devices will become cheaper. They would lose value over time. I think that apple isn’t gonna release a cheap iPhone but more of a low-function iPhone.

    • Sokrates

      A cheap iPhone gets even cheaper over time.

      • Alex Marwaha

        not necessarily

    • Because cheap iPhone doesn’t necessarily means last year’s tech. It will be priced affordably, somewhere between $300 and $400, and still have this year’s chips and iOS 7, with probably lower spec’d camera, perhaps no Wi-Fi 802.11ac and likely 8/16/32 GB storage tiers

  • KraKsX

    I think lots of people forget the iPhone 5 16gb is currently $650. So if the iPhone5C can hit 350 or even 450, Its still a VERY cheap [C] iPhone.
    Would I buy it? Hell no, I want the BETTER iPhone 😀

    • Zero

      Same thing I said, I’m going with the premium iPhone, not the cheap one, it will still be good on the market for the people that can’t afford the premium iphone but yet people is gonna fall in love with the cheap iPhone because of iOS,and the great ecosystem.

    • Yujin

      I think the 5C is not mean much for the American market but as a budget phone for the developing world that still far superior to android crap phones

  • rasengan720 .

    even if the iphone 5c is around 350 bucks it will most likely be bought more often in the US its not gonna be sold much in other countries.. what kind of budget phone is it if it’s its still beyond the budget of many people around the world?

  • Brody Boswell

    After what Google did with its nexus range this better be below $300 at least, as that was the price of the nexus 4 and this will have much worse specs

    • Frozen Bee .GFKS

      but hundred times better OS

    • Rowan09

      The Nexus 4 costs less than $300 off contract or are you speaking about the tablet? No premium phone costs $300 I wish.

    • mehrab

      It prolly wont be it”ll get a great os and eco system and will retain a good price and apple is a hardware company google is mainly software hence the cheap prices they make money thru google plus youtube etc

  • Alex Marwaha

    all this is is a cheap plastic version of an iphone 5. so basically, if u want to buy an iphone 5 buy this instead. iphone 5s is a higher price because it has higher specs, duhh. this was made for people who want and iphon 5 but cant afford it.

    • Alexander Bus

      Finally, the one who truly understood it! Spread the knowledge, oh all-knowing!

  • Yujin

    When the new iphone 5S comes out, you will be able to get a nice phone at $100 with contract. It is called the iPhone 5… The 5c will likely be a medium range phone that will no be $100 on contract…maybe $50 or free…better yet, let the Chinese buy then at $300…. Still, apple is forcing 3 tiers, top of the line, upper medium (last year model) and lower medium, iPhone 5C (for china no cause is cheap)

  • blastingbigairs

    Nothing from Apple will ever be cheap. I think this is just a phone geared for younger people who want some color. Apple hasn’t come this far by worrying about if someone can afford one of their products or not. Keep dreaming folks! Buy an Android device if you want a cheap smartphone.

    • Rowan09

      Which Android device is cheap and a premium device? My friend has an Android from MetroPCS and its junk but cost him $300. What exactly do people mean by cheap? Cheap in the iPhone 5C case I assume means cheaper but $99 for a phone in the US is just not going to happen especially a smartphone. $200-$350 is actually cheap for a good non-contract phone, so I assume those price range is what the 5C will be.

      • Alexander Bus

        Nexus series from Google is cheap and, while it’s not exactly premium, it still can compete with high-end devices(especially software-wise). And you can get the latest unlocked version just for 299$!

      • Rowan09

        I just checked eBay and the Nexus 4 is selling for $299 used, I don’t know who told you it came out at $299 becaus it never did. When the Nexus 4 came out it was $600+ in stores. Where do you see them for $299 I need to buy some and resell them?

      • Kurt

        Google Play store sells the 8 gigger for $299 right now.

      • Rowan09

        Ok but that was that the original price because the Nexus 4 is old now? It doesn’t make sense how best buy would sell the phone on contract for $199 when you can buy it straight up for $299. Who in their right mind would buy a locked phone on contract instead of just paying $100 for an unlocked Google version?

      • Alexander Bus

        I didn’t get what you asked with “but that was that” but here’s the answer to it – yes, 299$ was the price of the Nexus 4 since launch.

      • Rowan09

        Oh we’ll you learn something new everyday. I don’t get why best buy was selling it for $599 out of contract. The Nexus is a great phone but its not a top seller so the iPhone 5C is most likely going to be around the same price.

      • Alexander Bus

        Well, it’s time to learn something again!
        BestBuy is not a software giant – it can’t sell expensive phones for zero profit because they don’t get anything long-term out of it, like Google does. Google gets more users, more Play purchases and basically everything described in this article. So any store that wants to sell Nexus 4 has to add their profit on top of the original price from manufacturer because that will be their only profit. But Google, on the other side, has tons of money but is in the need of users so they choose to lose money on sales but gain people.

      • mehrab

        Buying an android device is like buying a device for 6-8 months of usage. So yeah hence the peice and googles a software company incase you didnt know? They have tons of services which they make money from which are on the phones! Get it?

      • Alexander Bus

        Hmm, if only my previous comment could get through moderation…
        Fine. I’ll post another one.
        Please, google before you state things on the internet. You’re wrong and I can’t shove a link in your face because it takes too long to process.
        Google Play(official Nexus store) sells brand new and unlocked Nexus 4 for 299$ for 8Gb version and 349$ for 16Gb one.

        And also, never check eBay first for things, it’s dumb. “Oh, I wants myselfs a brand new car – gonna hit up a second hand market!”

  • Ricardo Martinez

    “In an interesting note, Ritchie sees the iPhone 5C as serving the purpose of the aging iPod touch – to introduce new customers to the Apple ecosystem”

    Been saying it all along. If apple comes out with the iPhone 5C it doesn’t make sense to continue the production of the iPod touch.

  • Kurt

    “The fallacy those who think price is all that matters fall into believing that all consumers value the same thing,” – Ben Bajarin

    Regarding cell phones, I have never met one person in my life that actually believes this.

  • n0ahcruz3

    Apple and cheap doesnt even go in the same sentence. Android OS will dominate the world with these sub-200$ or less smartphones. iOS will be a niche. The rumored “cheap” iphone will probably priced not less than $300 eg. iPad mini. And they will probably remove some features that are on the 5S in order for it not to cannibalize the sales of the 5S.

  • anonymous

    this seems like the most sensible decision apple made in a really long time..
    the ones looking for an upgrade of ip 5 will get ip5s, and the ones looking for an excuse to not buy the iphone due to its cost can keep quiet for sometime.

  • Gorgonphone

    This bs is for the same folks who bought and are happy with ipad mini 1

  • Dante Arellano

    The idea of iPhone 5 c could be to give the chance to young people like kids or people that just can’t affor a iPhone even they Want to buy it the idea is no to bad for everybody for us premium iPhone in the end a big big iPhone community, take tha Samsun.

  • Dante Arellano

    It’s easy to fix the problen of the carriers just buy your iPhone factory unlocked I know is lot money but you will able to pick your carrier any time just like me $45 unlimited iPhone 5 iOS 7.

  • Fernando M

    what if its a $99 contract free phone??? What will happen than?

  • Kash Gummaraju

    Iphone 5C to launch with 5 mp camera, a5 dual core, retina but lower ppi, plastic unibody, no flash, low res front facing camera, different colors, 3.5″ screen, small battery, $100 on contract, $330-$400 off contract, and siri. This is essentially an iphone 4 in a new package and faster processor.

  • While I can certainly appreciate different opinions and points of views, you always come here to bring down iOS and always link to some post showing how iOS is inferior to Android. You have you’re very own agenda coming here, so I suggest you don’t waste your time reading a blog that focuses on a platform you don’t believe in and start spending more time on Android blogs. Again, I respect your opinion. It’s just it’s getting old seeing your comments taking down iOS every single time.

    • MacServiceGuy

      Hadn’t realized a consistent point of view was unwelcome here just because it’s the direction of dissent. I don’t troll. I don’t curse. I don’t raise my voice (digitally speaking), I just make strong arguments with data and links to back them up. And the response is, essentially “we can’t get around your logic, please go away since you disagree with us”.

      ok – you got it, i’ll never post here again.