So today Apple released the colourful iPhone 5s and iPhone 5c at an event that Apple said would ‘brighten everyone’s day’. The ‘everyone’ on the invitation was thought to include those in the market for a less premium device, those who usually buy one of the two previous generation devices that continue to be sold after a new flagship is announced. However the iPhone 5c basically has the iPhone 5 internals and a colourful plastic external body that’s cheaper to produce. This would be fine if it wasn’t sold at the usual price point of the previous generation, like the iPhone 5 would be if two models weren’t introduced today. So basically this is just a way for Apple to increase their profit margin on previous generation sales. And to add to that the iPhone 4S (now 4s) is still hanging around as the cheapest of the three.
I can see two possible things happening next year. One is that the 4s will disappear with that price point not being replaced and that the 5c (with a new name) will drop in price slightly with a small spec bump to have a product lineup of just two with a wider gap between it and the flagship. The second possibility is that the 4s will be replaced by the 5c and the 5c will be replaced with a moderate update with a new flagship as well. So standard lineup of three generations with hand-me-down internals but slightly higher margins on previous generations compared to previous years.
While Apple is a premium tech company, it’s difficult to not feel disappointed that they didn’t ‘throw a cat among the pigeons’ in the mid-range phone market. Dominated by bland clones running versions of Android from two years ago it would have brought some much welcome competition to the stagnant mid-range category. Today is a victory for Apple’s shareholders and colour lovers.