C is for China? The industry reacts to Apple's iPhone 5C unveiling
Our Mobile Gaming Mavens discuss
Substantial leaks ensured that the unveiling of Apple's iPhone 5C didn't take place in Cupertino last week, but rather in the days leading up to the event.
What was interesting for us at PocketGamer.biz, however, was just what impact the phone's design and (apparently not all that) cheap price may have on Apple's supposedly 'high end' image, and whether the handset will be success in markets like China, heavily rumoured to be its target.
Early reports suggest not. Either way, we asked the Mavens:
In a year or so's time, will we view iPhone 5C as the breakthrough device that helped Apple target consumers previously out of its reach, or does it not go far enough to meet the needs of markets like China?
Scott Foe, Big Head Mode
Apple's iPhone 5C may well lead the firm to significantly greater market penetration in China, all while Apple slides down the dangerous slope of "line extension" by offering more than one device in the current iPhone line.
It's one thing to capitalise on price elasticity of demand by segmenting your master consumer brand into both luxury and affordable offerings, in the way that Toyota has done with the Lexus and the Toyota lines of automobiles.
Unlike Toyota, however, Apple risks falling into the Nokia trap of consumer confusion by telling customers that an iPhone is an expensive/cheap, fast/slow, high/low storage, heavy/light, maybe a fingerprint sensor, better/good camera phone.
The further extended the iPhone line becomes, the greater the opportunity for competitors to flank the top of the market with one luxury option which all of the hipster elite adore, and the greater the opportunity for competitors to flank the bottom of the market with an incredibly affordable phone on which you can call your mama.
The danger is compounded by the notion that middle-brands are being squeezed from existence, as it becomes more common for consumers to spend on low-end (but adequate) brands in non-interest areas, and luxury brands in interest areas.
So, are we headed for a squeezed Apple sandwich with a Microsoft/Google bun? Only time will tell...
Michael Schade, Fishlabs
64-bit CPU, double GPU performance, game controller support combined with a hundred million plus install base within 12 months from now: F2P console-style gaming in your pocket here we go!
Brian Baglow, consultant
I don't think anyone's waiting around, twiddling their thumbs, waiting for the iPhone to be cheaper, or more a bit more powerful.
Developers will be asking themselves if the new devices will add to fragmentation, or open up new markets. The answer to both is umm, maybe...
They'll sell well (if the subsidy on the 5C is decent) and they'll add more users to the App Store. There may be a bit more work to make use of the 64-Bit opportunities.
That's about it.
As for China, a great deal of the coverage (on PocketGamer.biz and elsewhere) outlines that this is going to be a tough market for Apple to make any real impact.
Jani Kahrama, Secret Exit
This has been mentioned on the interwebs to some extent, but it would be tremendously more productive for developers to be able to filter out older devices than to wonder how this 64-bit advantage applies to the real world.
John Ozimek, Dimoso
I would actually like to know who started the whole '5C is for China' rumour, as it has created a classic Apple hype bubble where it's now getting pilloried for having not done something it never said it would do.
Price, brand and value are intrinsic to the Apple experience, and I think that delivering that at a very low price that competes with a messy, fragmented Android market in China is not something that Apple wants or needs to get into.
If a deal with China Mobile can deliver the equivalent of the $99 with contract offer that is available in the US, then it's a different ballgame, as Apple then not only has a much lower price point, but it has the infrastructure, scale and marketing of the major operator behind it.
Indeed, I think that we should think of the 5C as 'contract' rather than 'China'. For the first time, Apple has created a brand new model of phone that can be offered at an attractive price by operators, rather than offering last years phone, as has been the case up until now.
I think that is incredibly important in expanding Apple's market in markets it is approaching saturation for premium priced devices.
As for the 5S, I have seen some comments about how it will sell in China, even at it's very premium price. That's the aspirational power of the brand. The new phones look great, the camera features sound impressive, but it's more iOS7 that I am looking forward to in terms of a new Apple take on mobile.
Keith Andrew, PocketGamer.biz
Don't get too excited John - it's just a re-skin. Works identically. No revolution there. Perhaps for iOS users, that's just as well.
Personally, I like the look of the 5C, but really it's neither one thing or the other. Would have been better just to sell the 5. Maybe even rebrand it the 5C - C for 'Classic' or some shit.
John Ozimek, Dimoso
But, it's got colours...
I don't think iOS7 is revolutionary tech, but Apple designs have had a habit of creating a ripple effect through tech and beyond. For example, it'll be interesting to see whether flat design influences the next iteration of Android.
Jared Steffes, Furywing
I thought that the 5C just seemed like a way to phase out the old screen size - that is until I saw the 4S is now free on contract in the states. Is it being phased out or is this part of their lineup?
When I sold my iPhone 4s they went to buyers in Florida and Southern California taking them into South America to sell. There are also a lot of companies advertising cash for their old iPhones. I assume they are going to sell them in emerging markets as well.
The rich and fanatics will buy the new phones in the emerging markets, but do the new features mean anything to me? Not really.
Dave Castelnuovo, Bolt Creative
It's no secret I think Apple has the best products in the industry ,but I think this release cycle makes a lot more sense than people (market analysts) let on.
First of all, anyone that thought that Apple would release a cheap phone for emerging markets, one that would compete with a bargain basement priced Android, should have their heads examined. Apple just isn't going to do that.
Scott created an analogy between Apple and Toyota but I think that's an incorrect way of looking at it. Granted Toyota makes really good cars and it has a great luxury brand with the Lexus, but Apple will never have an equivalent to the Yaris. Apple is more of a luxury brand like Mercedes Benz or BMW.
It has a high end product but are experimenting with slightly less expensive models in order to expand their market.
In this I think the 5C will be successful. Sure, if Apple decided to offer an extremely low end product I'm sure it would sell like hot cakes and sales would spike among emerging countries.
Does Apple really want that though? How much value does the low end consumer have other than making a number go up on a spreadsheet each quarter? Do those customers buy apps? Do they buy music? Do they buy movies? Will they buy an iPad or a Mac? I don't think so.
For Apple, the opportunity is profit and it still corners that market in the mobile industry.
Sure, its margins are going down a bit as competition rises, but it also makes a lot of money off of ancillary products like the App Store and funneling people into the rest of their products.
When analysts dismiss this view they are practicing superficial thinking. They are putting stats in front of revenue and profit. It's backwards thinking and unfortunately it's typical of most industry watchers.
Really if you look at it, the 5C isn't really all that different than their previous product offerings. They release a new phone, the old phone is discounted and the phone before that is discounted even more.
The thing Apple did differently this round was change the design of the old phone in order to make it more appealing for consumers. I think it has done a great job in this. The colors of the 5C are fun and would actually look tempting if I wasn't already getting the 5S.
This can only grow the number of consumers who would have not purchased an iPhone because they didn't want to get the "old" model and because they couldn't afford the new one.
I have no idea how much it will grow that market but early indications are that the 5C is selling incredibly well with a lot of carriers reporting more demand this year than any other.
Also, is anyone really surprised that there is more demand for the 5S rather than the 5C?
Oscar Clark, Applifier
Seems to me that again Apple has done just enough to keep its position. That's impressive in itself, even if its not giving me personally any reason to go back to the iPhone.
I'm sure the 5C is probably going to be extremely profitable as I'm sure Apple has been very smart on the build costs; and the slightly higher price does retain their ideology of being higher class; more Mercedes A-Class than BMW in my mind.
And before someone kicks back, I'm not talking about volumes of sales, it's more about the brand value that a mainstream alternative offering to a reliable brand brings.
The 5S remains an iterative step forward in terms of performance, but with only a top storage capacity of 64GB it feels impoverished to me. That hasn't felt like enough for a long time; but again that's probably me being overly demanding - I'm not even satisfied with Android devices that come with 32GB combined with a 64GB storage card.
I am interested to see how the controllers work, but suspect I'd not get as much use out of them as I'd like. Depends on how widespread the support will be I guess. I have 4 Bluetooth game controllers I never really use already.
IOS 7 is an ok step forward; but still feels a little tired in my mind. More like we are the ones programmed to accept it, rather then a big step forward.
So all in all I think Apple has done enough. Just.
Keith Andrew, PocketGamer.biz
I get the comparison to Mercedes, but I don't really agree.
That image has been chipped away with the likes of the iPad mini, and the 5C is an extension of that. As a friend said to me today, smartphones as a whole just don't have that perceived glamour anymore - they're the standard. They're the norm.
While Apple has a reputation for good build quality and the brand is a trendy one, I don't think you'd find many consumers on the street who would describe it as the "Mercedes of the smartphone world" - as Samsung pointed out in its attack ads, your Gran is just as likely to have one as you are.
That's not Mercedes. That's Coke.
Harry Holmwood, MAQL Europe
I think, brand wise, Apple is where Sony was with TV in the mid nineties. Still perceived as 'better', and able to charge a premium price, but the reasons why becoming increasingly unclear as the competition catches up.
That said, there's something about iOS that does cause people (well, me, anyway) to engage with the device differently.
I find I download way less apps/games on Android phones than I do on iOS. I wish I knew why. My head tells me there's no reason any more for that to be the case, but it is. Maybe there's still some magic there that is keeping the experience premium, even if we can't quite put our fingers on it.
Oscar Clark, Applifier
Harry, you are right. Sony (of the 90s) is a much better analogy - Coke remains a bad one. Sure it defines the brown cola concept, but its a preference not an aspiration.
I think we forget how privileged we all are and how Apple's device remains elusive for many. Not for the tech nerds like many of us - we are always looking for the next - but amongst a mass-market audience, an iPhone still has a degree of status attributed to it.
Interestingly, though, amongst my daughter's age group (early teens), BlackBerry is still the device of choice - go figure.
All that being said - I still don't want one...either the 5C or 5S.
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Fraser Ross MacInnes | 09:34 - 18 September 2013
The 5C is a device that I don't fully understand because it's hard to divine Apple's business objective. If indeed the hype bubble is correct and Apple created a device with the express intention of attacking emerging markets, then the 5C is the right device at the wrong price point.
If however, the 5C is more about giving a more attractive package to the market segment that traditionally tends to buy the cut price, last generation device as opposed to the premium latest model, then it could be a master stroke.
In that category, the last generation iPhone is almost always in more direct competition with capable Samsungs at the same price point (100 bucks or free depending on the contract) - finding a way to further seduce that market segment while keeping manufacturing and component costs down (by basing the re-shelled device on identical innards to the previous model) is a very smart business decision.
It's also exactly what Tim Cook is often lauded for - he has been described as a supply chain maestro - perhaps the 5C is the first real post-Jobs fruit to be borne of that...
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