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Apple plays to the middle market with colourful iPhones

Seasoned Apple watchers will have successfully predicted nearly all the hardware in the two new iPhones that have just been unveiled by CEO Tim Cook in a hotly anticipated presentation. But while one model…

Cheap and cheerful or gold and flashy. You now have a choice. Martin uit Utrecht

Seasoned Apple watchers will have successfully predicted nearly all the hardware in the two new iPhones that have just been unveiled by CEO Tim Cook in a hotly anticipated presentation. But while one model conforms to the tried-and-tested tech upgrade trajectory we have seen in recent years, the other is a bit more of a mould-breaker - not least because it’s made largely out of plastic.

Sticking to the familiar two-year lifecycle in iPhone designs, Apple has upgraded the iPhone 5 to the 5S. This comes with a few hardware tweaks - most notably a significantly increased performance thanks to the newly developed A7 processor which is as powerful as that found in a desktop computer. It has tapped into the burgeoning market for health and fitness add-ons by including a distinct M7 chip, designed to efficiently (continuously) measure motion data. Until now, this had been a big drain on battery life.

The tradition of Apple bringing what were once expensive professional level features to the consumer market continues. Following on from face and voice recognition in iPhoto and Siri, we now have the introduction of a fingerprint reader on the phone. This combines high security with ease by allowing the phone to be unlocked with a single touch from the right person’s finger. Whether this is just a fad will be for the market to decide.

Security is at the forefront of many minds these days when it comes to technology purchases. Apple made no promises about stopping government security agencies from reading all your tweets and emails, but it has promised that fingerprints will not be stored on its databases, which should allay concerns about the NSA getting its hands on even more personal information about you.

The 5S also has a better camera lens, and flash and camera software are combined to offer better pictures, slo-mo video and better low light pictures. For a touch of glamour, you can get your 5S in gold as well as the traditional white and black.

But the foray into colour doesn’t end there. The iPhone 5C, announced alongside the 5S can be yours in green, yellow, blue, white or pink, if you’re willing to overlook the slightly odd Connect Four-style cutouts on the back of the case.

The iPhone 5C is significantly different. Some of the prestige hardware has been replaced with polycarbonate to cut costs so Apple can sell a 16GB version for $99 (although you’ll be locked into a two-year contract). Apple’s previous strategy entailed selling last year’s model at a cheaper price in order to maintain demand for the newer product. Whether there is a big enough differentiation between the 5C and the high-end product is difficult to predict, but the price tag suggests that they will sell.

Observers like to carry out “teardowns” of technology products to work out profit margins based on the cost of a device’s component parts. Teardowns of last year’s cheaper iPad mini seem to suggest that although profit margins may have been down on earlier models, Apple maintained its 50-58% margin on each device. It would be no surprise to discover that Apple has found a way to apply these manufacturing techniques in this cheaper iPhone while maintaining the same build quality and margins.

The 5C seems to be directly targeted at the midrange sector and emerging markets, which are currently dominated by Android phones. In a nod to the importance of emerging markets, Apple will release the new phones in China on 20 September, at the same time as launching them in the US and the UK, meaning Chinese Apple fans won’t have to wait any longer. That said, phones that have succeeded in the Chinese market before now typically have a wider screen size than Apple is offering.

Are the new features of the iPhone 5S enough to make it worth upgrading? If you currently have an iPhone 5 then probably not, although you could sell on your old device to offset the cost of switching. Many consumers will be coming out of an 18-24 month contract soon and may be sitting on iPhone 4 or 4S models – the longer screen, better battery life and camera may be enough of an inducement to switch to the new versions.

Alternatively, owners of iPhone 4 4S and 5 models have been promised an operating system upgrade at the end of this month, which will be like getting a new phone. This will be the first software that Johnny Ive has had a hand in designing following Apple’s reorganisation. The upgrade radically changes the interface, refreshes the apps and offers different features, something which has not occurred in any previous update. Anticipating that this degree of change may be a shock for some consumers, so Apple is reportedly prepping its online and instore support for those suffering from iOSTSD (iOS Traumatic Stress Disorder).

So, it’s nods to the middle and eyes to the East with the new iPhone launch but also a play-safe appeal to Apple fans with a traditional, higher-specification upgrade. Which version of the new iPhone is the bigger success may dictate future directions for the company.

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6 Comments sorted by

  1. John Crest

    logged in via email @live.com.au

    $99 in some countries but Australia ain't one.

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  2. Ben Mather

    logged in via Facebook

    Just to be clear - the 5S isn't as powerful as desktop computers. Instead it employs a 64-bit processor akin to desktop processors. A cheap desktop processor can blast the socks off any mobile device and most expensive laptops.

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  3. robert roeder
    robert roeder is a Friend of The Conversation.

    retired

    The iphone would have to be the spying device of all times, it has a hard wired app which sends out everything you do, sees through camera, records all purchases for those who use that service, now the NSA and ASIO want your finger prints. Democracies gets the fools they deserve.

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  4. Khalil A. Cassimally

    Community Coordinator at The Conversation

    The iPhone 5c may be priced at US$99 (with a contract), but in most countries, including China and numerous developing countries, phones are sold without contracts and therefore without subsidies. For example, in China, the phone will be sold at a painful $733.

    Is the 5c then competing with cheaper hit (Android) phones and the middle market? Judging by price alone, it doesn't appear so.

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  5. Comment removed by moderator.