Apple iPhone 6 sales disappoint, shares plummet 7%

[poofyhairguy]

It was never meant to be "the cheap phone."

You are right and wrong.

I mean everything you said about the 5C's market position as it was is 100% correct. But what is missing is the truth that the 5C had a mission it never got to see through because the lineup was ended- the creation of a new column on your chart for the developing world. Part of the long-term plan for the 5C starting this year probably was for it to be the first low-end " affordable " iPhone. Apple was determined to keep margins at a certain level all the way down the price tiers, so the 5C and its successors were supposed to scrape the absolute bottom of the market to get more marketshare. Until the 5C Apple couldn't dream of keeping normal margins in a $200 off contract phone because all its "cheap" phones were former flagships made of metal.

Because the 5C failed in the market compared to expectations Apple scrapped that plan and basically gave up any hope of having majority marketshare vs Android. In that time the developing world decided it could save up and buy an iPhone flagship as an aspirational product, so a C series and dealing with low-end customers was no longer needed. Margin is a percentage so selling a more expensive product is always better!

The end result is an Apple that has gone full luxury brand and reaps the profits from that. Meanwhile Android goes commodity with a price race to the bottom and only the Apple (and somewhat Samsung) brand can still command flagship pricing. Part of today's success was the failure of the 5C, when Apple learned it's better to just put out the best it can do every year and that's all.

 

[Ichinisan]

Sometimes, you need a visualization to understand. Here it is...

On-contract prices for base model:

     $200         $100          $0           
2010 A4 iPhone 4  XX iPhone 3GS XX iPhone 3G 
2011 A5 iPhone 4s A4 iPhone 4   XX iPhone 3GS
2012 A6 iPhone 5  A5 iPhone 4s  A4 iPhone 4  
2013 A7 iPhone 5s A6 iPhone 5c  A5 iPhone 4s 
2014 A8 iPhone 6  A7 iPhone 5s  A6 iPhone 5c 
2015 A9 iPhone 6s A8 iPhone 6   A7 iPhone 5s

...

They had flagship phones with cheaper plastic bodies (3G and 3GS). Those cracked all around the corners and buttons for no good reason. Compared to the 3G and 3GS, the 5c is awesome quality plastic.

Did you just compare iPhone 5C to iPhone 3G and declared it has "awesome plastic"?

I want to make fun of you so bad but I will hold it........

you had to go that far back? You had to skip the 4 and 4S......oh my...

...and skip the 5.

I'm saying the 5c plastic was far better quality than the typical plastic phone or any previous plastic iPhone.

 

[ControlD]

It wasn't even really "cheap, for Apple." It was right in line with Apple's established price strategy.

My wording was poor (I was handing out Halloween candy and hasty with my reply). I meant cheap for Apple to manufacture thus a better profit margin. Old guts + cheaper housing = win.

For the record I sort of wish they still made the plastic models, I just wish they were a little cheaper too. Would make a nice phone for my daughter when she needs one, which will be soon.

 

[CZroe]

...Apple responded with the 5c, it sold well, but not in the volumes we're accustomed to seeing for iPhones, so the strategy was binned.

Was it? All signs point to the iPhone 6c being announced next month. They had planned to announce it last month.

...I do think however that the plastic shell was some type of turnoff or at least a draw at best or we would have seen that strategy carried through for further generations.

What makes you think we won't? The iPhone 6C is expected to be announced next month. This has been expected since BEFORE the iPhone 5C was canned.

And I think that's the huge mistake. The price is the same but it had the cheap look with the plastics. Apparently it's not as huge a hit as they expected, and that's why they never made anything like that again.



If you don't get it yet, the bolded is why a dozen people here said that the C line was a flop. Not because of perceived sales ("I see a lot of them around"), or actual sales (numbers, numbers, numbers), but because Apple abandoned it after one try and never made a plastic iPhone again.

LOL! "Never again?!" It's barely been a month and before it was even canceled we knew that they weren't expected to announce the successor until November. Get a grip! I can't believe so many people how follow these things well enough to know that the 5C is canceled are so blind to the rest of the industry. All signs are that announcement was simply delayed for two months and you people are jumping to all kinds of conclusions based on the likely-incorrect assumption that it's gone forever.

why would I buy the same phone from last year in a cheap plastic body for the same price???

Because A) It's not the same price and B) it had a slightly larger battery and C) it was the currently offered phone they could afford at that price point and D) it had more usable RAM than newer 64bit devices.



I love it when someone asks a question they think can't be answered as if to demonstrate that it has no answers when actual answers abound!

Edit: it looks like rumors for the iPhone 6C are pointing to Q2 2016 now. I think they just need to sell out of 5S phones and feed that initial demand for a $0 contract 5S.

 

[CZroe]

You are right and wrong.



I mean everything you said about the 5C's market position as it was is 100% correct. But what is missing is the truth that the 5C had a mission it never got to see through because the lineup was ended- the creation of a new column on your chart for the developing world. Part of the long-term plan for the 5C starting this year probably was for it to be the first low-end " affordable " iPhone. Apple was determined to keep margins at a certain level all the way down the price tiers, so the 5C and its successors were supposed to scrape the absolute bottom of the market to get more marketshare. Until the 5C Apple couldn't dream of keeping normal margins in a $200 off contract phone because all its "cheap" phones were former flagships made of metal.



Because the 5C failed in the market compared to expectations Apple scrapped that plan and basically gave up any hope of having majority marketshare vs Android. In that time the developing world decided it could save up and buy an iPhone flagship as an aspirational product, so a C series and dealing with low-end customers was no longer needed. Margin is a percentage so selling a more expensive product is always better!



The end result is an Apple that has gone full luxury brand and reaps the profits from that. Meanwhile Android goes commodity with a price race to the bottom and only the Apple (and somewhat Samsung) brand can still command flagship pricing. Part of today's success was the failure of the 5C, when Apple learned it's better to just put out the best it can do every year and that's all.

If that's so then why are they planning an iPhone 6C announcement next month?



You also seem to forget that Apple never stated their goals. We all assumed that and were shocked to learn in 2013 that Apple had no intentions of going for that market and only ever intended to make a cheaper phone to substitute for "last year's model." Why are you still so convinced that they intended it for the developing world and intended to wage war against low-cost Android phones when people in the know have known since 2013 that it was never their intention?

Edit: it looks like rumors are pointing to Q2 2016 now for the iPhone 6c.

 

[openwheel]

Oh so now we have official iPhone 6C event scheduled in November?

 

[Ichinisan]

Was it? All signs point to the iPhone 6c being announced next month. They had planned to announce it last month.

With the announcement of the 6s and the continued production of the 6, I assume the 6c was scrubbed (if there ever was one) and they just decided to keep producing the 6 for that price point.

 

[poofyhairguy]

Why are you still so convinced that they intended it for the developing world....

You act like I am the first person to say that:

Apple took the wraps off of the iPhone 5C, a lower cost device targeted at the emerging markets. The addition gives Apple a device designed to take emerging markets momentum away from Android.

http://www.zdnet.com/article/apple-launches-iphone-5c-color-costs-aimed-at-emerging-markets/

This article actually uses the word flop:

Combining tech giant Apple's (NASDAQ:AAPL) strong brand with a product that's affordable enough for emerging market consumers seems like a homerun business decision in the making, right?

At least, that appears to be the logic behind Apple's iPhone new-kid-on-the-block, the iPhone 5c.

However, investors are increasingly noticing that something clearly isn't resonating with the iPhone 5c in this market that it was practically designed for.

http://www.fool.com/investing/general/2014/03/24/apples-iphone-5c-fails-where-it-matters-most.aspx

Right now a 8GB 5S does the job the 5C isn't doing:

While the iPhone 6s and iPhone 6s Plus will be the first choice of many fans, Apple is in plans to launch the iPhone 5s 8GB variant to please mass buyers in the global markets. TechOne3 has exclusively learnt that the company is set to launch the 8GB iPhone 5s this year to fill the empty space following the discontinuation of the iPhone 5c.

http://techone3.in/apple-iphone-5s-8gb-variant-coming-this-year-3247/

 

[cronos]

LOL! "Never again?!" It's barely been a month and before it was even canceled we knew that they weren't expected to announce the successor until November. Get a grip! I can't believe so many people how follow these things well enough to know that the 5C is canceled are so blind to the rest of the industry. All signs are that announcement was simply delayed for two months and you people are jumping to all kinds of conclusions based on the likely-incorrect assumption that it's gone forever.

Ok you got me. Haha. I didn't even know that there's a plan to make a 6C, or any other plastic iPhone. Didn't know that there's even a plan, so didn't know that there's a delay in announcement.

If Apple do end up making a plastic iPhone again, I will then reconsider that maybe the C line isn't as big of a flop I thought it to be. But until that happens, I will be sticking to my previous understanding that the C line, a.k.a the colorful, plastic iPhone, is a flop

 

[openwheel]

Since we are making up stories, I hear that iPhone 7P is coming out next February as the ultimate premium device. It sports DSLR quality camera lense, sapphire glass screen, solid gold home button, and built-in Tom Ford perfume sprayer. They say the refills are very pricey, but you can get the knock offs from walmart for $20 instead.

 

[Ichinisan]

The 5c lasted exactly as long as it was supposed to.

On-contract prices for base model:

     $200         $100          $0           
2010 A4 iPhone 4  XX iPhone 3GS XX iPhone 3G 
2011 A5 iPhone 4s A4 iPhone 4   XX iPhone 3GS
2012 A6 iPhone 5  A5 iPhone 4s  A4 iPhone 4  
2013 A7 iPhone 5s A6 iPhone 5c  A5 iPhone 4s 
2014 A8 iPhone 6  A7 iPhone 5s  A6 iPhone 5c 
2015 A9 iPhone 6s A8 iPhone 6   A7 iPhone 5s

Apple never said it was supposed to be for emerging markets. "Analysts" we're simply speculating about its purpose and they guessed wrong.

It was meant to save a few $$ by selling it instead of the 5.

I can speculate too: Apple probably benefited a bit more by converting the production lines from the 5 to produce more 5s units.

 

[Mopetar]

If it sold 25 Million units, I have a hard time calling it a flop, especially for a non-flagship device. Even though it's Apple, 25 million units is better than almost any other smartphone model with the exception of other iPhones or Samsung's Galaxy line.

You can claim that it's still a flop because it failed to meet expectations, but you can make that argument about anything if you set expectations high enough. For all we know it could have sold better than the 5 would have in its place because some people may have bought it for the weird color choices that were reminiscent of the old iMac/iPod color schemes from around a decade or so prior. Maybe they even killed it because it was too successful and was cannibalizing sales of their higher-margin products. The point is that we don't have all that data so calling it a flop relies on some arbitrary idea of success, usually based on the opinions of people who aren't all that correct in general.

The only thing that lends much credence to it being a flop is that Apple discontinued it. I'd almost say that "failed experiment" is a better label in that case. Personally I wouldn't mind if they brought it back as a 4" phone choice, but it looks doubtful that they'll ever offer that option again.

 

[Ichinisan]

If it sold 25 Million units, I have a hard time calling it a flop, especially for a non-flagship device. Even though it's Apple, 25 million units is better than almost any other smartphone model with the exception of other iPhones or Samsung's Galaxy line.

You can claim that it's still a flop because it failed to meet expectations, but you can make that argument about anything if you set expectations high enough. For all we know it could have sold better than the 5 would have in its place because some people may have bought it for the weird color choices that were reminiscent of the old iMac/iPod color schemes from around a decade or so prior. Maybe they even killed it because it was too successful and was cannibalizing sales of their higher-margin products. The point is that we don't have all that data so calling it a flop relies on some arbitrary idea of success, usually based on the opinions of people who aren't all that correct in general.

The only thing that lends much credence to it being a flop is that Apple discontinued it. I'd almost say that "failed experiment" is a better label in that case. Personally I wouldn't mind if they brought it back as a 4" phone choice, but it looks doubtful that they'll ever offer that option again.

Apple discontinued their A6 iPhone at exactly the time they planned to do it. Only speculators suggested that Apple wanted it to take over some new market segment. It was never meant to do that. It was never priced to do that.

The 5c was an iPhone 5 inside.
The 5c was only meant to replace the iPhone 5.
The 5c was priced to replace the iPhone 5.
The 5c did exactly that.

If the iPhone 5 had not been discontinued 1 year after release and the 5c had never been released, the iPhone 5 would have sold at least 25m more units than it did. Was the iPhone 5 a "flop" because it lost out on 25m+ sales it could have added after the 5s was released?

 

[ControlD]

With the announcement of the 6s and the continued production of the 6, I assume the 6c was scrubbed (if there ever was one) and they just decided to keep producing the 6 for that price point.

That was my assumption as well. I honestly haven't seen anything on the tech sites about a 6C coming next year, but I don't surf a lot of Apple specific rumor sites either.

 

[Artdeco]

That was my assumption as well. I honestly haven't seen anything on the tech sites about a 6C coming next year, but I don't surf a lot of Apple specific rumor sites either.

Same here.

The supply chain is leaky as hell, we'd know about it if one was coming. Apple leaks stuff like this too, in order to freeze the market.

 

[StrangerGuy]

Apple discontinued their A6 iPhone at exactly the time they planned to do it. Only speculators suggested that Apple wanted it to take over some new market segment. It was never meant to do that. It was never priced to do that.

The 5c was an iPhone 5 inside.
The 5c was only meant to replace the iPhone 5.
The 5c was priced to replace the iPhone 5.
The 5c did exactly that.

If the iPhone 5 had not been discontinued 1 year after release and the 5c had never been released, the iPhone 5 would have sold at least 25m more units than it did. Was the iPhone 5 a "flop" because it lost out on 25m+ sales it could have added after the 5s was released?

I gotta laugh at the sheer mental gymnastics needed at calling the 5C a flop when there's 99.99% certainty that it pulled more profit per unit sold than any other non Apple handset at 10M+ sales volumes. The only reason it didn't sell more than 25M is because the 5S was a much better non-brainer choice for $100 extra.

 

[Artdeco]

I gotta laugh at the sheer mental gymnastics needed at calling the 5C a flop when there's 99.99% certainty that it pulled more profit per unit sold than any other non Apple handset at 10M+ sales volumes. The only reason it didn't sell more than 25M is because the 5S was a much better non-brainer choice for $100 extra.

Agreed, what's going to be interesting to watch is Huawei destroying Samsung & LG over the next few years.

 

[slackerinabox]

Agreed, what's going to be interesting to watch is Huawei destroying Samsung & LG over the next few years.

It will be brutal, especially when you add Xiaomi to the mix. Samsung will be regretting the decision to copy apple IP to the point of alienating their #1 buyer, especially now that apple seems to be relying on them less and less already, give it 3 years...

 

[Anubis]

It will be brutal, especially when you add Xiaomi to the mix. Samsung will be regretting the decision to copy apple IP to the point of alienating their #1 buyer, especially now that apple seems to be relying on them less and less already, give it 3 years...

I somewhat agree here. ive tested a lot of phones from these 2 and they always impress me. even a cpl years ago when no one had heard of them they were putting out really well built devices

 

[slackerinabox]

I somewhat agree here. ive tested a lot of phones from these 2 and they always impress me. even a cpl years ago when no one had heard of them they were putting out really well built devices

I'm really enjoying my xiaomi products in general (headphones, fitness tracker) - they have a nice attention to detail that's more Apple than Samsung which is hella impressive at the price points they're targeting. I believe they'll have some trouble penetrating the U.s. marketing, but a direct to consumer approach might work here. Alcatel as well, I have a shitty tablet made by them and, unlike most shitty tablets, it works just fine and has decent battery life. That was not my experience with a samsung, at flagship prices.

Everyone in the media thinks apple should be shaking in their boots because of the Huaweis, Xiaomis, meizus, oppos, and lenovos, while I think apple will be just fine. Samsung should be damn terrified, especially since Samsung lacks the attention to detail that many of these Chinese upstarts embraced from Jobs (it's ok, he stole it from them via Buddhism, and they're aware). LG actually makes solid phones and is ahead of what the consumer wants (more battery life, not just great benchmark scores).. I think they can carve a niche, samsung's too generic to stick around.

 

[poofyhairguy]

I can speculate too: Apple probably benefited a bit more by converting the production lines from the 5 to produce more 5s units.

Probably. That is good insight.

 

[StrangerGuy]

I'm really enjoying my xiaomi products in general (headphones, fitness tracker) - they have a nice attention to detail that's more Apple than Samsung which is hella impressive at the price points they're targeting. I believe they'll have some trouble penetrating the U.s. marketing, but a direct to consumer approach might work here. Alcatel as well, I have a shitty tablet made by them and, unlike most shitty tablets, it works just fine and has decent battery life. That was not my experience with a samsung, at flagship prices.

Everyone in the media thinks apple should be shaking in their boots because of the Huaweis, Xiaomis, meizus, oppos, and lenovos, while I think apple will be just fine. Samsung should be damn terrified, especially since Samsung lacks the attention to detail that many of these Chinese upstarts embraced from Jobs (it's ok, he stole it from them via Buddhism, and they're aware). LG actually makes solid phones and is ahead of what the consumer wants (more battery life, not just great benchmark scores).. I think they can carve a niche, samsung's too generic to stick around.

Yup, that's exactly my experience too. My Note 3 on Lollipop 5.0 with all the advantages possible still gets handily beaten by a $120 Xiaomi running ancient Kitkat in common tasks like camera / Chrome webpage loading times and Wi-Fi reception. Flagships shouldn't be losing to bargain basement devices equipped with less than half the hardware power in anything at all.

Samsung et al need to get that into their thick skulls of theirs if they still want to keep selling premium phones.

 

[dawheat]

Meh - folks act like all the electronics we buy (TV, stereos, etc) are all Chinese brands. Even in far more mature and commoditized markets, brands still matter.

For sure Samsung is a huge target and has a ton of challenges and they will need to continue to differentiate. The Edge display was different (even if only for style), their cameras this year are arguably the best you can buy, their displays are better than others.

Whether they can keep ahead of the curve is a fair question - but folks act like the writing is already on the wall when they've probably sold more flagship phones this year than all the rest of the entire Android ecosystem combined.

Unlike almost everyone else besides LG, they can introduce new tech before anyone else - whether it be new display tech, a superior SOC, or even things like new battery tech. The question is whether they can stay ahead in areas that matters and that they can effectively market.

LG BTW had pretty bad sales reported for all their noise about Android users "really wanting mSD".

 

[Anubis]

the prob with LG is that the G4 was more of the same, the G3 was a very nice phone but the G4 really didn't bring anything new to the table. and the V10 is just too big for a lot of people

 

[Anubis]

woops wrong post