During yesterday’s earnings call with Wall Street investors and analysts, Apple CEO Tim Cook has officially admitted to the iPhone 5c not meeting the company’s internal sales goals. Although the handset proved popular with first-time smartphone buyers, the majority of customers have opted for the flagship iPhone 5s.
If The Wall Street Journal is to be trusted, Apple is expected to “scrap the plastic exterior used in the iPhone 5c” in 2014 and will instead release two iPhone models, one with a 4.5-inch screen and the other featuring a five-inch display…
The iPhone 5c experiment has officially failed, Cook asserted, as the iPhone mix was “different than we thought”. He underscored Apple may have underestimated demand for the iPhone 5s as sales exceeded internal projections.
It took us some time in order to build the mix that customers were demanding. As a result, we lost some units for part of the quarter in North America.
Apple sold a record 51 million iPhones during the Christmas quarter, but the company did not provide a breakdown of handset sales by model.
I absolutely love the bright iPhone 5c colors and its plastic design.
Although it’s just a year-old handset repackaged in a new casing design and sold discounted just like past previous-generation iPhones, I’m sad it turned out a dud.
From my vantage point, part of the problem are unrealistic expectations that had been fueled by the rumor-mill which in the months leading up to last September’s double-iPhone launch insisted Apple would create a budget handset for the masses.
As a reminder, the handset costs $99 with a two-year contract, or $549 contract-free.
That’s a tough sell given a $100 more buys you the iPhone 5s with the latest 64-bit A7 processor and M7 motion coprocessor, an improved camera, Touch ID and more.
Cook acknowledged as much:
I think the iPhone 5s, people are really intrigued with Touch ID. It’s a major feature that has excited people. And I think that associated with the other things that are unique to the 5s, got the 5s to have a significant amount more attention and a higher mix of sales.
He also said during the Q&A portion of the earnings call that Apple has “zero issues” coming up with new ideas, hinted at mobile payments being “one of the thoughts behind Touch ID,” confirmed that the iPod business has been declining for some time now and lots more.
Tim Cook photo by Adam Amengual for Bloomberg Businessweek.