If further proof were needed that the iPhone 5C – Apple Inc.’s (NASDAQ:AAPL) colorful plastic ‘budget’ smartphone – is not an outstanding marketing success for the Cupertino firm, a new market analysis by Needham & Company shows that the aging iPhone 4S sells six times better in the United States than the 5C. As reported by Apple Insider, quoting figures provided by analyst Charles Wolf of Needham, the iPhone 4S makes up 25% of American iPhone sales, while the 5C captured a scant 4% of the market and the iPhone 5S accounted for 71%.
Even a cursory comparison of the two models reveals that this decision can be considered rational on the basis of each smartphone’s characteristics. The average price of an iPhone 5C in the United States is $550, while an iPhone 4S, retained as a legacy product by Apple (AAPL), costs an average of $450, a $100 saving over the supposedly “entry level” C-variant of the iPhone 5. However, it is far from a “cheaper” phone in terms of design, despite being more affordable.
The iPhone 4S features a stainless steel outer case, which is inevitably tougher and more durable than the iPhone 5C’s polycarbonate shell. From a psychological standpoint, the 4S feels stronger and more serious thanks to its metal case, while the plastic-hulled 5C seems more toy-like. The older iPhone also retains the sleek dignity of Jony Ive’s design preferences, while the garish bubblegum colors of the 5C look silly – and Apple (AAPL) customers are not buying products from the firm to look silly or juvenile.
Apple’s customer base seems to take themselves very seriously, and sometimes show a strongly condescending attitude towards people buying non-Apple products. The 5C does not cater to this demographic, while the 4S does.
Though the 4S’s technical specs have slightly lower numbers than the 5C (an 800 MHz core as opposed to 1.3 GHz, for example), it is not significantly worse in many ways than its particolored successor. Memory in currently produced 4S phones is 8 gigabytes, while older phones bought on the secondary market may include 16, 32, or 64 gigabyte memory units. Memory in the 5C is 8, 16, or 32 gigabytes, with no 64 gigabyte version.
Overall, the iPhone 4S is an acceptable substitute for the 5S which is slightly sturdier, looks and feels more like a high-end smartphone, and costs $100 less on average. In light of this, it is no wonder that 10 million people per quarter buy into the Apple (AAPL) ecosystem through the 4S, while less than 1.75 million do the same via purchases of the 5C. Apple has clearly been wise in this case to continue production of an older product which is still popular and offers more robust sales than its latest, semi-abortive attempt at a low-end smartphone.