What if Apple had made an 'iPhone 4C' instead?
Some have said the iPhone 5C is too expensive to make a mark in places like China. A new analyst report suggests Apple should have revamped the aging iPhone 4 instead.
Apple's new mid-range smartphone, the iPhone 5C, has come under fire for being far more expensive than many Wall Street analysts were hoping. Now, one such firm has laid out a plan B that never emerged: a phone with the guts of an iPhone 4, but the look and feel of the 5C.
That device, dubbed informally the "4C", could have saved Apple more than 20 percent compared to what it's paying now and been more attractive in emerging markets, Toni Sacconaghi of Bernstein Research said in a note to clients Monday. The savings could come in the form of the plastic case, and a laundry list of older tech like 3G (instead of LTE radios), 8GB of memory, and 512MB in RAM.
All that could lead to an (imaginary) iPhone that costs somewhere between $375 to $400, which would be well under the $441 Apple's charging now for the one-year-newer iPhone 4S internationally, Sacconaghi said. That's also far below the approximate $733 and $864 Apple's charging for unsubsidized versions of the 16- and 32-gigabyte 5C models in China.
"Such a device would have required little to no incremental investment for Apple to manufacture, provided a further test of price elasticity for its offerings, and could have been discontinued/phased out at any point had Apple been disappointed in its performance," he added.
What happened instead was that the iPhone 4S is sticking around, likely for another year, and that the iPhone 4 (which has many of those same components) has been discontinued.
But don't count the iPhone 4 out, just yet. Sacconaghi said he expects all of the remaining iPhone 4 units to make their way to China to be sold there.
"After asking Apple, it is our understanding that this is to eliminate inventory, and that Apple will not be continuing ongoing production," Sacconaghi wrote. "Accordingly, we would not be surprised to see global iPhone 4 inventory (perhaps a few million iPhones) being shipped into China."
A 4C would help Apple reach lower prices and better compete with companies like Samsung. But one thing the Bernstein report sidesteps is performance. A device with technology that's equivalent to 2010's iPhone 4 would certainly be capable of running many of the main operating-system features, but more software fragmentation among Apple's devices, and trip up developers who might be attracted to that aspect of Apple's platform.
Ahead of last week's announcements, it was widely believed the 5C would be around a $400 device, coming in under the iPhone 4 in cost. Such a device would have attracted new smartphone buyers, especially in places like China and India, where competitors have found success with a wider array of products and prices. It remains to be seen just how well the iPhone 5C, and now less expensive iPhone 4S will do in those regions. Apple has typically announced preorder numbers of its phones by now, a practice it appears to be skipping this time around.
