Imagining iPhone 5S and iPhone 5C: Pricing and availability
Analyzing rumors and speculation surrounding Apple's 2013 iPhone 5s and iPhone 5c, including how much it will cost and where you'll be able to get it
New designs, new processors, new radios, new features big and small, at the end of the day it still all comes down to how much it costs and whether or not you can even get it. Urban myth tells us Steve Jobs was responsible for dreaming Apple's amazing products into existence, but Tim Cook was the one who figured out how to get them made as efficiently and affordably as possible. For the iPhone 5s there probably won't be any big surprises, though there could be some storage size and color option twists. For the iPhone 5c, however, it could be a whole new thing.
iPhone 5s: The 128GB wildcard
The original iPhone launched in June of 2007 at $499 for 4GB and $599 for 8GB - on-contract. That price turned out to be a non-starter. In September of 2007, Apple dropped the 4GB model entirely, and dropped the price of the 8GB model to $399 and later introduced a 16GB model at $499. Still to high. So, in 2008, Apple switched to the subsidy model for the iPhone 3G. It debuted at $199 for 8GB and $299 for 16GB on-contract. Those price points have stayed consistent ever since, even as storage options have changed to the current $199 for 16GB, $299 for 32GB, and $399 for 64GB.
One wild card this year is a potential 128GB model. If that happens, does 128GB slide in on top of existing models, like 64GB did with the iPhone 4S, or does the 16GB model get dropped to make room for it in the existing grid, like 32GB did with the iPhone 3GS? When the iPad 4 got a 128GB option, it slid in on top. Given the premium 128GB could demand, and given past as prolog, we could well be looking at 16GB for $199, 32GB for $299, 64GB for $399, and 128GB for $499.
As to availability, there's been some speculation that new colors like gold, and possibly steel gray, could be exclusive to certain regions, like Asia, or to certain versions, like the 128GB model. Apple hasn't done regional color exclusives in the past, both white and black have been available internationally ever year they've been available. They have done price point exclusives, however, going all the way back to the iPhone 3G. The white version was 16GB only. Like storage, color is an option that could be presented as premium.
iPhone 5c: The new deal
There are far more questions when it comes to iPhone 5c pricing and availability, simply because there's never been a second, less expensive iPhone released before, so there's no history or pattern to draw upon. The closest thing we have to a point of reference is the iPad mini, which was somewhat cheaper, but still available in the same basic model sets and tiers as the full-sized version. In order to protect the more lucrative higher end iPhone, however, Apple might be tempted to offer fewer options, including storage sizes.
Best guess, it starts at $450 off-contract. That's pretty much what's assumed to be Apple's subsidy, which means there's a possibility it could be $0 on-contract in subsidized markets, if Apple chooses to release it that way. Since people like free, but ultimately don't respect it, $49 or $99 on-contract might be more realistic to preserve perceived value. Again, if it's offered that way.
That $450 model could be 16GB, maintaining the current bottom end of the storage lineup. If higher storage options are made available, they'd likely follow the same tiers, 32GB for $550. Would Apple offer 64GB and 128GB models for a less-expensive iPhone? They don't currently offer 128GB for the iPad mini, so that's one data point to consider.
When it comes to availability, it may be tempting to think Apple will keep the iPhone 5c restricted to emerging markets like China, India, South America, and Africa. However, there's an emerging market of first-time smartphone buyers and upgrades in established markets as well, and unlike early adopters, they tend to be more price sensitive. The iPhone 5c, colorful and less expensive, could be highly attractive to them as well.
Besides, China doesn't start with a "C" in China.
There's also been some speculation as to whether or not Apple could make the iPhone 5c exclusive to Apple Stores, keeping the retail margins to pad the presumably lower wholesale margins, and to fit into Tim Cook's new iPhone focus. While anything is possible, low margin products are typically meant to sell at larger scale, and Apple's retail reach just isn't as big as their retail partner reach. This might just be a case where making it up on volume is a very real thing.
$450 isn't rock bottom. Apple hasn't done rock bottom to date. They do make a $50 iPod, but they removed the screen to do it.
The iPhone 5c isn't meant to compete with $100 Android or Nokia phones any more than the iPad mini or MacBook Air were meant to compete with dollar store tablets or netbooks. To drop lower on the pricing matrix, like the shuffle did for the iPod line, Apple may just turn to their new trade-in program, and offer factory refurbished older generation models at a much more significant discount. They won't be dirt cheap, but they'll be cheap for iPhones.
More to come!
We'll be imagining a lot more about the iPhone 5s and iPhone 5c, including designs, screens, cameras, chipsets, finger-print readers and more over the next week, so stay tuned. We'll only know for certain, however, when someone at Apple holds it - or them - up on stage, presumably on September 10.
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