So now onto the iPhone product line split that I have been calling for on this blog for 3 years now. Thank you Apple for giving this split. And yes, the new 'discount model' iPhone 5C is as rumored, more plastic and blatantly visually different than the top model, now the new flagship 5S.
The 5C has quite good specs for the lower price model, but the price differential is very modest. The world average price of smartphones according to brand new IDC numbers out this week, is 372 US dollars this year. The unsubsidised price of the 5C converting from UK prices is about 619 dollars (from 390 UKP price before VAT) This price is obviously without the 2 year contract, most of the smartphones around the world are sold without contract. Thus the cheapest new iPhone model in its entry price level, is nearly twice as expensive as the average price of smartphones sold around the world. Yes, its slightly cheaper than the new flagship, iPhone 5S, but not by much. This means, that the iPhone 5C will not be able to achieve significant gains to Apple in the price ranges where most smartphones are sold. So this means that the Android opportunities keep growing and the big winner is Samsung. Oh, and who did color versions of the same phone first? Nokia. And who did a colored phones line of the currently popular touch-screen form factors? Nokia. Not in its Lumia line but already before on the N9 model where Lumia stole its good looks.
Meanwhile the new flagship iPhone 5S has the fingerprint sensor but didn't get NFC. The screen size did not grow (am surprised) and the camera sensor still keeps its pixel count at the modest 8mp. At least Apple grew the pixel size, added a larger aperture optical unit and added some clever software to make the camera better, in particular in low-light conditions. And the flash is now a two-element flash allowing for color control in flash situations (more natural colors in varying conditions)
Oh, and yes, the iPhone 5S comes in a few glitzy colors including gold. And what a nice idea, many like the gold-colored phone. Now, where had we heard that before? The old joke still holds true, to find out what is in the newest iPhone, look no further than the 5 year old Nokia. Nokia introduced a flagship gold-colored model, the 8800 in 2008. Literally, 5 years ago. Bling-bling.. Apple and Nokia, who was the leader, who was the follower...
So the Apple iPhone product line has been split, two new models in one year. About time! Shoulda been done a few years ago. And for all those who were on this site saying Tomi is crazy or Apple will never do this, or Apple doesn't need to do this.. what do I know, eh?
What will happen to Apple. The market share is currently 13% (Q2, 2013, traditionally the lowest point per year in the cyclical nature of iPhone sales). Last year the annual market share of the iPhone was 20%. This split in the product line will not help grow Apple much, maybe pick up a few points. I'd say Apple ends this year with about 22% market share for the full year, not more. The price should have been nearer the world average price, or even better, near the Emerging World typical price points, which IDC reports for example in India the average price will be 200 US dollars by the end of this year. That is the market where Apple hoped to bring strong gains with the iPhone 5C, but its too expensive for that. The iPhone 5S will definitely get plenty of buyers and Apple is doing well, but this pairing is not differentiated enough, and not a big leap ahead, enough, to give Apple a strong jump in market share. They roughly hold steady. The big gainer will continue to be Samsung who offer smartphones in ever wider variety and price points and form factors.