Monday, January 20, 2014

Apple’s new strategy: iPhone 5C and 5S

Apple introduced the new generation iPhone and discounted sales of the previous iPhone 5 on September 20, 2013. These two versions of iPhone are the product of strategy shifts instead of technology revolution.

Compared with 35 percent in the fourth quarter of 2012, Apple secured a market-leading 42 percent of smartphones owned in the United States in the fourth quarter of 2013. We cannot deny it’s another winning strategy from iPhone. This sales strategy helped Apple generate 55.3 million revenue in the fourth quarter of 2013, which is a 16.42 percent increase from over the same period in 2012. It is interesting to study how Apple Company generates such a sales boost.

So, what is the difference between the iPhone 5C and the iPhone 5S? The 5S has a faster processor, a built-in fingerprint scanner and a better camera than the 5C. However, the 5C comes with more colors and it is cheaper!

Along with the premium version iPhone targeted to the latest technology lovers, the iPhone 5C is designed for young users, less-affluent audience, which also opened the gate for Apple to the low-cost smartphone markets. While open to the new market, Apple in fact is able to boost its profit margin because iPhone 5C is made of plastic rather than glass and aluminum.

Even iPhone 5C is cheaper than iPhone 5S, the iPhone 5C may not be cheap enough to attract those bargain hunters. An interesting question to ask here is how can Apple predict its 5C sales before the product launch?


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