Apple: 8GB iPhone 5c is for mid-tier markets where ‘LTE is becoming more established’

By , Mar 18, 2014

pink iPhone 5c pink background

Today’s release of a new, cheaper iPhone 5c model with a rather paltry eight gigabytes of storage has prompted many writers to postulate as to why Apple may have limited the handset’s distribution to only a few markets, namely the United Kingdom, France, Germany, Australia and China.

According to Apple itself, that device is meant to target the mid-tier smartphone market where the iPhone has been under lots of pressure from an avalanche of rather affordable and pretty capable Android handsets. Although Apple could have rolled out the 8GB iPhone 5c across all of its markets, they’ve chosen to go only with a few countries where “LTE is becoming more established”

An Apple representative told Re/code:

The mid-tier iPhone segment is growing year over year and the 8GB model provides a more affordable option for markets where LTE is becoming more established.

This makes sense given that the iPhone 4s, which is also still sold, does now support LTE networks. An Apple spokesperson confirmed to Fortune’s Philip Elmer-DeWitt that the 8GB iPhone 5c is, for the time being, available in the United Kingdom, France, Germany, Australia and China.

In the United Kingdom, the device is priced at £429, or about $711. This is £40 cheaper, or approximately $66, compared to the £469 (about $777) 16GB iPhone 5c model.

Over in the United States, the 16GB iPhone 5c sells for $100 after a two-year contract, or $549 for the contract-free, unlocked device. Re/code speculates that Apple may have opted not to offer the 8GB iPhone 5c in its home turf because handsets are typically sold to U.S. customers subsidized – and many U.S. carriers are now offering the 16GB iPhone 5c subsidized for $99, or even free, with a two-year service contract.

iOS 7 teaser (iPhone 5c ad 006)

By contrast, customers in the United Kingdom are unable to purchase a subsidized iPhone directly from Apple. There are plenty of other countries where device subsidy is an exception rather than the rule, such as China.

On the other hand, things have been changing in the U.S. – mostly for the better – after T-Mobile last year separated hardware pricing from wireless service plans, effectively killing subsidy in favor of interest-free monthly device installments.

I’m very much looking forward to seeing whether the cheaper 8GB iPhone 5c is capable of generating sales in mid-tier markets, where competition from capable and inexpensive Android handsets has raised the bar high.

It’s not that the iPhone 5c isn’t an attractive handset.

This is a question of pricing, not quality. See, despite it being a repackaged 2012 iPhone 5 hardware with an improved cellular and Wi-Fi networking, the device isn’t competitive price-wise (relative to the Android camp). Besides, the fact that the iPhone 5s costs just a $100 more isn’t helping either.

green blue pink iPhone 5c side by side

My hunch tells me that the iPhone 5c is mostly for first-time smartphone buyers and those who are looking to upgrade from a low-end smartphone model.

I bought my Mom one as a birthday present and she’s absolutely loving the sharp Retina screen, the simplicity of iOS and the handset’s unapologetically plastic design.

The iPhone 5c really does feel great in one’s hand and I’m saddened it turned out a dud.

You?

Did you hold an iPhone 5c in your hand and, if so, what did you think of it?

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  • blist

    I like it, but it doesn’t feel like Apple product:/

  • Tom

    I liked it too, but I still can’t understand why iPhone 5C was released. It is same as iPhone 5 by spec.

    • fernando

      I think they replaced it because making plastic phones is way cheaper than making the luxury ones as the iphone 5

  • GG

    Shutup apple. 5C is garbage. Why would somebody want to downgrade from the nice and weighty feel of an iPhone 5 which everyone is used and accustomed to to a shiity plastic cheap feeling and looking crap that you opted for because that greed got the better of you. Now your junk isn’t selling so you downgraded the memory so you can lower the price. This is what you get for being ‘Unapologetically Plastic’ DONE!

    • Sokrates

  • #hashtagmeister

    ‘Let is becoming more established’ that must be Denmark..

  • Antzboogie

    I don’t understand why you don’t mention the full retail price without the two-year contract no one wants to do a contract anymore.

  • Repiuk

    I don’t get the fuzz about the plastic housing of the 5C. Working for the company who produces the plastics for the 5C I know how much product development and testing has been taken place before Apple approved the materials they wanted to use for the 5C. This is a very highly specialized material that did not saw daylight overnight.

    Yes, the device is set into the marked as “low end” smartphone but looking at the specs and the pricing (Europe) its not a bad deal and you still have a way better quality and designed device comparing to competitors. I often hear people complain about cracked housing an wearing from competitors than from the 5C.

    I still have a 5S as I have a weak spot for the best tech available but I would get the 5C without a doubt if it contained the specs of the 5S.

    • blu

      part of the “fuss” is the price. The 5c sells for what the 5 should have been once the 5s came out. Instead, Apple made a cheaper phone with the internals of the 5 with a cheaper (cost) plastic housing, but did not pass that savings on to the consumer.
      Apple broke their norm of offering last years model a the mid level phone when the now one was released. If they had kept the iPhone 5 as mid level and then used the 5c as the lower end (in the 4s catagory) I don’t think their would be near the complaints, and the 5c would be selling better since it would be cheaper.

      Only reason my sister, her husband and my mom got a 5c instead of a 4s is Best Buy had a sale for a free 5c with a 2 year contract. That was well worth it.
      I have also seen Walmart selling it for like $30 with a contract, so that is not too bad either.

  • Matt Collin

    Christian, I am same as you because my mum is getting one after i told that Apple has released slightly more cheaper iPhone so she can get more affordable contract and she finally can join me on iMessages which i sorely missed her from there when she was on Samsung Glaxay S3

  • https://twitter.com/MrElectrifyer MrElectrifyer

    $711 for that cheese phone? This makes no sense to be an intended seller, Apple can’t be that stupid…it’s all the same smart and very effective marketing tactic they used on the 4th gen iPod touch to get people to shell out more cash for the latest device (5th gen iPod touch in that case, iPhone 5s in this case).

  • Tommy

    Had a 5C for a couple of weeks before I upgraded to the 5S. Reason? Well the “unapologetic plastic” scratched so easily it looked worse than a 3GS.

  • Nate Smith

    “This makes sense given that the iPhone 4s, which is also still sold, does now support LTE networks.” Since when does the 4s support LTE??

    • Qynto

      thats what i was wondering too…

  • n0ahcruz3

    Rip off

  • n0ahcruz3

    Rip off

  • Laszlo Gaspar

    At first I didn’t know anyone who had one but in recent months things have really picked up and while I only speak for a small part of the UK, I know more people with a 5C than 5S.