A little over a month old, the iPhone 5c is looking like a disappointment for Apple. Though it’s too early to know for sure, major retailers including Best Buy, Radio Shack, and Wal-Mart have slashed their price on the device, which isn’t good news for Apple. Though the recommended price is $99 with a contract, Wal-Mart, for one, is selling it for and unprecedented $45—less than half price. The Wall Street Journal has also released a Reuters-confirmed report claiming Apple cut its orders from the phone’s manufacturer, Hon Hai Precision Industry, by 33 percent. Reuters also reported that iPhone 5C orders from Pegatron Corp have been cut by 20 percent.
But the iPhone 5c’s failure isn’t a total surprise—without Steve Jobs to lead it, Apple seems to have missed the mark on a few key marketing points and is now paying the price.
1. The Color
In theory, the different color options are a good idea from a marketing perspective. The tagline for the phone is “For the colorful,” and all of the commercials for the device have been just that—colorful. But in making its lower-cost device iPhone all about the color, Apple has left a good chunk of its potential customer bank untapped. Not everyone that wants a cheaper iPhone wants a flamboyant hot pink or lime green one. With only one understated color option available, the devices appear almost childish. Sure, the iPhone 5c is great for those that are price-conscious and “colorful,” but what about those of us who are still price-conscious, but prefer a device that we use hundreds of time per day to be slightly less highlighter-hued?
2. The Double Whammy
For the first time, Apple boldy released two iPhones simultaneously. In doing so, though, they inadvertently deemed one of the iPhones as second best. It’s natural to associate price with quality, so when consumers see one device costing half as much as another, conclusions are going to be drawn. Pinning the iPhones side by side is a big marketing mistake on Apple’s part, mainly because it demonstrates that they don’t know their customers very well. If there’s one thing that Apple customers aren’t, it’s frugal. Apple fans are happy to pay extra to get a device they’ll love, so when they’re given a choice between a brand new phone and basically a colorful version of an old phone, the choice is clear. But then there’s the argument that Apple wasn’t really looking to target existing customers with this device—it was looking to attract new ones, which brings me to my next point…
3. The Price
If Apple was truly looking to attract a new market, namely customers that prefer lower cost options, they missed a huge red flag: it’s still too expensive! Though it’s half the cost of the iPhone 5s with a contract, the device is still over $500 when purchased unlocked, which is a becoming an increasingly popular purchasing route for customers that don’t want to get bogged down with expensive contracts. If Apple wanted to market the iPhone 5c as a low cost device, they should have built a low cost device. At $45 dollars with a contract at Wal-Mart and other retailers, the device is much more reasonably priced for its target demographic. Still though, it remains to be seen whether sales will improve.