Apple unveiled two new iPhones a few days ago, going against what many tech journalists believed to be common sense and replacing the new iPhone 5 from last year with an iPhone 5C and iPhone 5S. The iPhone 5S is this year’s most expensive model, carrying on Apple’s proud, innovative tradition from the iPhone 5. In fact, it retains all of what we love about the iPhone 5 and then adds a gold (or champagne) color with Touch ID fingerprint scanning capabilities. The Touch ID addition, apart from the dual LED flash in the iSight camera, was the best part of the announcement. Apple did a little “hover” thing with the camera roll, and I’m gonna enjoy that part most when iOS 7 makes its way to my iPhone 5 within the next week.
You will likely have read many sentences about the presentation up to now, with every article regurgitating what Apple said and did, the specs and features, and pricing. Thus, I will not bore you with those details; instead, I look to discuss some things that I think should outweigh these two new shiny iGadgets that will soon grace electronics store shelves.
Replacing the iPhone 5 Made Little Sense
I understand that Apple wanted to show that it can innovate yesterday, but it just goes against common sense to get rid of your latest flagship smartphone to put something in its place that looks like a child’s iPod Touch with cell phone service. The iPhone 5C takes its design from the iPod Touch which, if Apple didn’t notice, doesn’t sell as well as its iPhone models. Even the older iPhone models outsell the iPod Touch (one of the many reasons why, I suspect, Apple doesn’t report or say much about its iPod Touch sales in quarterly reports).
The iPhone 5C is a different beast than last year’s iPhone 5. The iPhone 5 would have been priced at $549 this year, after selling for $649 last year ($100 depreciation each year in selling price). Some people may say, “Well, the new iPhone 5S is better than last year’s iPhone 5,” and that may be true; at the same time, however, the new iPhone 5S is also $100 more expensive than the iPhone 5 would have been – and some customers are not willing to pay it over the next two years.
Also, there is no selection of choice between iPhone styles for those who want to pay $549 rather than $649 for their new iPhone. Now, this is where you’re probably going to want to knock me: “Hey, customers do get choice,” you’d say. “It’s just that their choices consists of playful kid colors.”
Yes, customers do get some color choices in the iPhone 5C, but what alternative does the customer have if he or she wants something more elegant but doesn’t want the $649 price tag? The only choices left to this kind of customer are the iPhone 4S (a two-year-old phone that will be denied web support next year in 2014), or the iPhone 5S. Is this the best that Apple can do with its customers? Is this the message Apple wants to send to customers: that is, if you want elegance with savings, purchase a two-year-old iPhone because we really don’t seem to care about your financial angst?”
Apple had a chance yesterday to provide more choices for its mid-range customers, who look forward to the $549 price tag (or $449) price tag on new iPhones and often wait until a year or more before purchasing them. What Apple did, instead, was unveil the iPhone 5C – a phone that I think resembles Apple’s commitment to something new but does not really spell innovation.
The iPhone 5C is More of a Kid Toy Than An Adult iPhone
I know I sound mean when I say that it is an iPod Touch with cell service, but it is. If you disbelieve me, place the fifth-generation iPod Touch right beside an iPhone 5C, and you will see some resemblance. That’s not to say that Apple didn’t try to make the iPhone 5C stand out with its transparent, on-screen colors that just so happen to match the color of your iPhone 5C. I gotta admit, though: I like the yellow one. I can do without the others, but that color seems so much more mature to me than the blue or green iPhone 5C.
Still, with the yellow iPhone 5C aside, the other colors look like lego building blocks for kids, or something that I would buy my niece when she turns “12.” It doesn’t seem to me that Apple considered maturity as a part of the iPhone 5C’s appearance when the company set out to create it. iOS 7 has been dogged by many a tech journalist because there are pink icons (and blues, oranges, and greens clashing) that look like something a child would paint or color on a sheet of paper. I get it that Apple wants to be colorful, but we don’t want “childish” here; I’m 29 years old, and I want to purchase products that match my maturity level. There’s an old saying I’ve heard all my life that Apple should adhere to: “when I was a child, I acted as a child, I thought like a child; when I became a man, however, I put away childish things.” Apple can innovative in a child-like manner without succumbing to child-like behavior.
The iPhone 5C is Not a Budget iPhone
I realize that this point is not entirely new, but I needed to get it on-screen. The iPhone 5C was deemed the “budget” iPhone that would help consumers purchase a great Apple product for less than the premium prices that accompany iPhones. With Apple’s stock tumbling some $300 a share over a year’s time, and still below the $500 a share pricing that comes to represent a healthy company, Apple decided to do what it always does – go stubborn, never listen to the critics. Expectations ran high that said Apple would price this iPhone 5C in the $350-$450 range so as to compete with Google and its Nexus smartphone lineup. As a Nexus 7 user, I consider Google to be Apple’s counterpart in Android OS – so I sat up with my eyes raised when I read about the low-cost iPhone.
Well, Apple was given the same warning with the iPad Mini last year: “price the seven-inch tablet alongside Google’s price for the Nexus 7.” Did Apple listen? Nooooo; the company decided to release a near-8-inch iPad Mini for $329 as a starting price. The iPad Mini’s starting price was $130 more than the 16GB Nexus 7 from 2012 cost ($199).
This was one of many points tech journalists discussed when pointing out the flaws of the iPad Mini. I’m sure that the iPad Mini provides great audio, graphics, and the rest (after all, I own an iPad 3 with Retina, so I know Apple products can be trusted), but many journalists gave Google’s Nexus 7 the win in the 7-inch category because the price and Android goodies outweighed the expensive, status quo-y look of iOS (not to mention its boring updates that contain nothing but bug fixes and “general improvements”). In other words, consumers don’t just care about specs; they want an affordable price too. But when you’re Apple, and you think you know what’s best for consumers rather than consumers, you overprice what could be a good product.
What does any of this have to do with the iPhone 5C? The iPhone 5C is nothing more than a repackaged iPhone 5. It’s not an inexpensive iPhone, nor is it the low-cost, budget Apple experience everyone hoped for. Instead, the iPhone 5C is not discounted at all because it is priced at the same price that the iPhone 5 would have if the iPhone 5 had not been discontinued ($549).
With this piece of info, however, we should ask ourselves: why would Apple create a new phone with budget expectations, only to turn around and put it at the same price that the iPhone 5 would have? If you ask me, creating the iPhone 5C was nothing short of Apple “spinning its wheels” to bring out something new because consumer expectation demanded it. Creating a different-looking phone, then slapping it with the same price as the old one (while creating a high-end model) gives the illusion of effort and innovation but provides no real fruit.
Had Apple created a new iPhone that was priced around $350-$450, it would have been able to scoop up some iPod Touch users who want an iPhone but cannot afford the premium price tag. It would have also been able to offer some variety for customers who do not want to wait for the expensive iPhone price to fall over the next two years. After two years, there’s only so much an iPhone can do (or any phone, for that matter), and a sweet price range would have made some customers upgrade within the next week rather than wait for another year or so. The fact that Apple chose to do something silly means that iPhone 4S customers will use the next year and wait until the iPhone 5S hits their sweet price range before upgrading. Apple, you just lost several new buys!
The iPhone 5C and Apple’s Dilemma
Apple is considered by some (me included) to be the King of Hype. When you want to boost your product and make people think it has wings (though it’s not true), look no further than Apple. One thing that has been said about Steve Jobs is that he made you believe, with each Apple presentation, that the latest iPhone was “the greatest” and that you couldn’t live without it. Even if you realized you would kick yourself the next day for having bought an iPhone you didn’t need, you would still wake up with a euphoric feeling because you purchased the next big thing from Apple.
Unfortunately, Apple did not pull off its mastery of hype this time. What Apple did was nothing short of deceit. The company wanted to create the idea that it is affordable ($99 with a two-year contract starting price), while pricing it at what the original iPhone 5 would cost this year.
What many do not know about contract pricing, however, is that the consumer pays the same price as someone who buys his or her phone unlocked, but does so over a two-year contract. In other words, the $99 price tag is the “down payment” for your phone; over the next two years, you will pay monthly installments towards the $549 price tag to your carrier. At the end of the two years, you will have paid $549, the same as someone who bought his or her device in full on day one. It doesn’t make sense to purchase a colorful iPhone when you can have a little color and purchase the latest iPhone 5S with a fingerprint scanner.
At the same time that Apple wanted to deceive you into thinking that $99 is such a dramatic price drop from $199 up-front (it isn’t), the company also wanted to make you think it had created a new product. “Call it the iPhone 5C,” Apple’s team said, “and make sure that we emphasize the pretty colors of the phones and color transparency of the screens. We’ll keep the specs of the iPhone 5 so that consumers buy the product (they won’t feel like its cheap).”
Unfortunately, however, it is, when you consider that the iPhone 5C doesn’t have the dual LED flash placed in the iPhone 5S, neither does it have the fingerprint scanner and Touch ID integration nor the style and look of the iPhone 5S design. It is nothing more than the iPhone 5 with color. But why did Apple redesign the phone in the first place, if it wanted to give color options? Why not just bring out last year’s model with new colors while retaining the design and look? To change the look of the iPhone 5 while ditching the elegant design from last year gives the impression of “cheap.” Maintaining the same price as last year’s elegant iPhone while creating a “cheaper-looking” model is a clever and fancy move by Apple but does more for its own profits than it does consumer choice.
At the end of the day, Apple’s new iPhone 5C was not given a “c” for “color” (although Apple would have you believe this), but for “crash.” The world’s most beloved fruit company totally bombed its so-called low-cost iPhone announcement yesterday. For people in China, the new plastic iPhone will cost $733, whether over contract or not, and is nothing more than the emperor who had no clothes. While he thought he was clothed, and everyone told him he was well-dressed, he was stark naked. Apple may believe that its name is highly esteemed, and Apple fans and tech writers may praise the company, but to me, Apple “has no clothes on.” Apparently, investors echo my sentiments, seeing that Apple’s stock prices dropped some $28, or 5%, yesterday immediately after the announcement.