Apple Trying to Win Back Market Share With New iPhone 5c, Analyst Says
Apple is clearly trying to win back some of the market share it lost to Android smartphones in the past year through the iPhone 5c it introduced Tuesday, said NPD analyst Stephen Baker. The iPhone 5c will ship Sept. 20 in the U.S., Apple said, at the most affordable launch pricing to date among any of its smartphones. A 16-GB model will cost $99 and Apple also will field a 32-GB version at $199, it said. The company will ship the new model in the most colors of any iPhone, in blue, green, pink, yellow and white SKUs, it said.
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The company also bowed an iPhone 5s upgrade to the iPhone 5 and apparently dropped the older model from its product line. No mention of the iPhone 5’s fate was made in the separate news releases that Apple issued Tuesday on the two new phones, but the iPhone 5 was no longer featured at the online Apple store Tuesday. A new 8-GB version of the older iPhone 4S is now being offered by Apple for free with the usual service contract. Higher-capacity versions of the 4S were no longer featured at Apple’s online store.
The 5c seems “designed to attract … newer smartphone customers” -- those who are “a little more cost-conscious” to “gain some share back,” Baker told us. The “biggest unknown” after Apple’s Tuesday news briefing was how the company will market the 5c, he said. It wasn’t clear if Apple will use the model to “go after the prepaid,” contract-free phone market and if the new model will “substantially open up” the iPhone to new consumers, he said. Apple played up the new colors more than the low pricing in the news release it issued about the 5c.
Apple will start taking pre-orders for the iPhone 5c Friday, it said. The phone will ship Sept. 20 to the U.S., Australia, Canada, China, France, Germany, Hong Kong, Japan, Singapore and the U.K., it said. At launch, it will be available at Apple’s online and retail stores, and through AT&T, Sprint, T-Mobile, Verizon Wireless and “select” Apple unnamed authorized resellers. Apple will also ship 5c cases in blue, green, pink, yellow, black and white at $29 each, it said.
The 5s will ship Sept. 20 in the same markets in gold, silver and “space” gray at $199 for a 16-GB model, $299 for a 32-GB model and $399 for a 64-GB model, said Apple. Cases for it will be available in beige, black, blue, brown, yellow and red at $39, it said. The 5s has a new A7 chip, making it “the world’s first smartphone with 64-bit desktop-class architecture,” Apple said in a news release. It also has a new 8-megapixel iSight camera and a new Touch ID feature that Apple said provides a way to “simply and securely unlock your phone with just the touch of a finger.” The new, upgraded processor is the standout new feature, said NPD’s Baker. With that, Apple is “really starting to position” the iPhone as “being a more all-in-one kind of device,” he said.
Apple is “certainly offering meaningful innovation” with the 5s, said Tony Cripps, Ovum principal device analyst. Moving to the 64-bit architecture “means Apple can genuinely claim to have brought something new to the smartphone party,” he said. The 5s should also help Apple “further cement its lead as a mobile gaming platform and will give the Android fraternity something to think about in a space whose significance is sometimes downplayed beyond the gaming world,” he said. “Ingratiating itself to the burgeoning community of health and fitness application developers with new sensors is also a good move by Apple at a time when consumer and professional interest in those categories are booming.” The 5s’s integrated capacitive fingerprint sensor will “build legitimacy for the technology in mainstream consumer electronics, although privacy concerns are bound to raise their heads in these newly paranoid times,” he said.
Both new iPhones will ship with iOS 7, the latest version of Apple’s operating system, which it called “the most significant iOS update since the original iPhone.” IOS 7 was “engineered for 64-bit technology” and has “hundreds” of new features, it said. IOS 7 will be available as a free software update starting Sept. 18 for iPhone 4 and later iPhones, the iPad 2 and later iPads, the iPad mini and the fifth-generation iPod touch, said Apple.
Best Buy is “working through details now” about the 5c and 5s and “will share more information as we have it,” said spokeswoman Shandra Tollefson. AT&T will offer the 5s and 5c starting Sept. 20, it said. The 5c will be available for pre-order Friday, AT&T said, but it doesn’t have a pre-order date for the 5s. Apple teamed up with NTT DoComo to make the two new iPhones available in Japan on the DoCoMo network Sept. 20, the companies said.