People lined up last week for a chance to be one of the first owners of the new iPhone 5. Queues outside buildings resembled lines at Disneyland, and people were probably just as excited to get their hands on a sleek new iPhone as they are to get on the Matterhorn (or to wear one of those cool Mickey Mouse hats, but maybe that’s just me). But now, people have a choice: spend $99 on a two-year contract and get a flashy, unapologetically plastic, dubbed by some as the “budget iPhone” (also, cleverly, “c is for cheap”); or shell out for a sexy gold 5s with a fingerprint scanner. I can’t remember a time when Apple released two iterations of the same product at the same time.
Previously, I was face-palming my stupidity and impatience at just not being able to wait for an iPhone 4S. Now consumers have a choice, although it’s still a relatively expensive one.
This is the first time that Apple’s walked the high-low line. With prices for iPhone 5s potentially topping $869.00.It’s no surprise that the 5c is budgeted at $71.00 per month for a two-year contract.
I’m no mathematician, and I can see the huge gap in numbers. Apple’s built itself up as somewhat of a luxury brand with sleeker products, smoother features, and nifty OS upgrades. Is Apple cheapening itself with the advent of its “budget” iPhone?
Some critics think so. TechCrunch contributors think it might: “$99 on contract price point doesn’t actually put a “cheaper” phone in Apple’s lineup, just the fact that it costs less than the 5s causes some people to perceive the iPhone 5c as “cheap”, and perception matters.” The main point is perception of the product, and the value of that perception. Other brands have straddled the high-low line with mixed success. Some brands are able to make the jump, while others fail as the perception of “elite product” falls to “attainable product.” Apple’s always achieved what seems to be impossible – creating an elite good that’s simultaneously accessible. Their timeline for release seems to be the key to that perceived success.
In response to critical reception of the iPhone 5c, Apple CEO Tim Cook responds that the tech giant never set out to produce a low-cost phone. Apple’s focus has always been on simplicity, sleek design, and a high-quality product – which has, for many iPhone users over the generations, justified the high price for the device.
Determining the price at which to sell a product is a slippery slope, however – price too low and the brand communicates cheapness (change word), but too high and that product becomes unattainable and above the echelon of “status symbol.”
Is Apple screwed either way? Does the response to the mid-market demand for the “budget iPhone” ruin its chances at being the high-end be-all-end-all smartphone to light the way for all other smartphones?
Has answering the call of the market brought the tech giant down a few pegs?
It’s too soon to tell, but with 9 million units sold last weekend, it’s apparent that the iPhone isn’t losing popularity and preeminence anytime soon.
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Social Incite Team
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