The launch of a new iPhone is always a major event, with the weeks and months leading up to the actual date fraught with anticipation and speculation over what Apple will unveil this time around.
On Tuesday, when Apple chief executive Tim Cook took to the stage, we should have had double the excitement as he revealed not one but two new handsets. The iPhone 5S is the new premium Apple device, priced from £549, while the iPhone 5C is the much-expected and widely trailed lower-cost version.
As almost everything Apple had planned for its two new handsets had been leaked ahead of the event, the only detail we all really still cared about was the price of this so-called affordable iPhone. Some were speculating Apple would go as low as £200, while most industry observers, including myself, guessed it would sell for around the £350-£400 mark. This would have put the device at a low enough range to open up iPhones to markets in new territories and age brackets; allow Apple to compete with the popular S4 Mini mid-range handset from rival Samsung; but remain expensive enough to retain the premium Apple brand.
Perhaps in a bid to prove it still has the power to shock during its heavily-trailed launch events, Apple managed to surprise just about everybody when it finally revealed the iPhone 5C’s cost. At £469 for the cheapest 16GB model, the 5C is effectively the iPhone 5 downgraded into a plastic casing and with a slightly reduced price tag compared to the iPhone 5’s £529 cost.
So while Apple deserves credit for offering buyers the iPhone 5’s quality hardware and software - aside from the aluminium casing - in a cut-price model, and with the addition of a choice of new colours, it’s failed to take the braver step of reworking the iPhone to compete with mid-range smartphones like the S4 Mini and HTC One Mini, which both come in at the sub-£400 mark.
This could prove detrimental to Apple’s future outlook in the mobile space. According to smartphone user stats for the second quarter 2013, Apple now has 14 percent of the global market, down from 17 percent for the same quarter in 2012. Meanwhile rival mobile platform Android, which offers mobiles priced from £100 up to £600, has totally dwarfed iPhone devices, currently accounting for a whopping 80 percent of the worldwide smartphone market.
Of course, this 80 percent is divided among a range of handset makers - although Samsung gets the lion’s share – while Apple has its 13 percent all to itself. But Android’s rapid rise demonstrates a major thirst for cheaper smartphone models, which are affordable across non-Western markets like Asia and Latin America, and more accessible to the younger buyers. Offering iPhones in blues and yellows will definitely make them must-haves for kids, but what’s the point of that move if only those with rich parents can afford them?
I don’t expect the iPhone 5C to be a failure; Apple still has its hard-core fans who will rush to upgrade, and the £60 saving compared to the iPhone 5 could be enough to attract a small selection of new customers. But pricing the two new handsets at only £80 apart - the 5S at £549 and 5C at £469 - means that the firm will be mostly competing with its own traditional customer base for sales, rather than enticing its core iPhone user base with the 5S, and competing with the S4 Mini and One Mini via the 5C.
If it wants to keep investor faith for the long-term, Apple needs to show it can grow its smartphone market share and start making a dent in the Android numbers, especially before Microsoft has any chance to catch up with Windows Phone now it’s bought Nokia’s mobile devices business. The next iPhone launch from Apple needs to bring something truly new to the table to achieve this, in the form of an affordable handset by anyone’s definition, rather than a slight remodel of a current version.
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