SAN FRANCISCO: Apple co-founder Steve Jobs, who emphasized high-end consumer gadgets over cheaper ones, may have been right all along. Last month, chief executive officer Tim Cook introduced the colorful iPhone 5C, a less-expensive version of Apple’s smartphone, to “serve even more customers” around the world. It turns out people so far are more interested in its pricier, feature rich cousin, the 5S.
Three surveys in the past two weeks said the company’s new high-end model is outselling the 5c by at least 2 to 1. KGI Securities, a brokerage firm, slashed its quarterly estimates for 5C sales by a third, and retailers like Wal-Mart Stores and Target have reduced the phone’s price. The Wall Street Journal reported Apple’s orders to suppliers for the iPhone 5C have been cut by a third.
Customers are shrugging off the $99 iPhone 5c even as Apple spends heavily to advertise the handset, which is last year’s model repackaged in a colored plastic case. The 5C, which costs $100 less than the souped-up iPhone 5S, is Apple’s attempt to lure buyers in developing markets like China, where Samsung and other Android phone makers lead. Even so, big sales of the pricier model are a boon because they carry fatter profit margins.
“Apple customers are still interested in premium products from a premium brand,” said Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Washington. “If anything, the 5C is a failed experiment in trying to please the masses. Apple should stay focused on the premium and let Samsung take the lower end of the market.”
