Will Apple’s two different market segment phone offerings help or hurt?

Posted on September 16, 2013 by aviyer2010

An article in the New York Times (September 11,2013) describes possible issues caused by Apple’s decision to offer the iPhone in a 5S and a 5C configuration, priced at $550 and $400. The cheaper model will have a plastic body unlike the steel body of the original model. While the cheaper model will drive volume, future versions will all need to appear in multiple versions. Will this dual pronged strategy enable Apple to increase volumes in emerging market countries like India and China? Or will it diminish the cachet of its current market position as more people carry the iPhone ? What feature sets will Apple have to reserve for its higher end offering to preserve markets?

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4 Responses to Will Apple’s two different market segment phone offerings help or hurt?

Qiutong Zhang says:

September 17, 2013 at 11:19 am

I remember there is one way to increase the sale of the products is to create another one that may be a little bit ” worse” than the first one. So Apple may want to use “5C” to promote the “5S”.
The other thing I want to mention that two kind of products are in different positions. “5S” stand for the great quality, lead technology and high price. “5C” have the colorful cases and much cheaper. Those two products are facing different class of customers based on the different demand.

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Yuntao Guo says:

September 18, 2013 at 2:28 pm

Personally, I think it is very poor way of promoting the iPhone and it will hurt Apple.
I remember the first three or four generations of iPhone, the iPhone is competing using its design, technology and other unique features. Now they are just competing for low price and poor quality. Although they claim that they do not have any innovation related issues, they will for sure lose their market and customer base.
I also disagree that they can expand their customer base in China by simply doing that. The 5C is cheaper than the 5S, but it is still a relatively expensive phone in China. If they can afford 5S, they will not buy 5C. So I think Apple should go back to its original way of competing: high quality and innovation.

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Ashish Agrawal says:

September 18, 2013 at 3:32 pm

Clearly, Apple’s decision of introducing the iPhone 5c is a strategic move. So far, Apple is considered to be as a premium brand and most of its products are high end product and are outreached to many people because of price.
The point to consider here is that, Now Phone industry has become a billion dollar industry and is increasing rapidly year on year. Currently, where the deep-pocketed consumers in the smartphone market have already been saturated with products, and companies such as Samsung Electronics, Google, and HTC have been coming on strong with alternative high-end products for this segment.
So, to find out the alternate market segment and in order to win lower income consumers, apple made an unprecedented effort to roll out a plastic version of its new smartphone (C5) that can fit in smaller budget.
Also both the devices 5s and 5c, are separated by several unique features, in this way apple on one hand trying to retained its position in high end market by offering different value propositions and on the same side trying to capture the new low priced market.

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Irina Benedyk says:

September 20, 2013 at 1:45 pm

For a lot of people Apple is innovation first. They always one step ahead. This is the point of i-phone users. And also the innovation in design. This is something so simple and at the same time so modern. Every new i-phone motivate consumers to buy new one instead of previous version. New apple 5c look like step back. This is not the spirit of Apple. This is not i-thing any more. This is regular phone, dozen of them are presented every year. Earlier, trying to capture new segment Apple did something really new (small i-pod for example). And now – they have done something what already done by LG, Samsung. It is incomprehensible. Look like Apple do not plan any revolution now. Will wait next year. Maybe i-phone 6 will return back Apple’s domination. And this is the plan?

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