iPhone5C: the 'C' Definitely Not for 'Cheap'

#Money

Wed, Sep 11th, 2013 20:00 by capnasty NEWS

Slate's Farhad Manjoo looks at the new iPhone5C, Apple's latest phone "for price-conscious consumers." It turns out that there's nothing really economical about the device. When you consider the internals, the iPhone5C is in fact more expensive than its predecessor.

Then there's the iPhone 5C -- the long-rumored cheap iPhone that isn't. It's made of plastic instead of the aluminum found on the bigger iPhone. It comes in five colors: green, blue, yellow, pink, and white. Other than that, it's got the same internals as the iPhone 5: same camera, same processor, same capabilities. And same price. Indeed, the 5C is so similar to the 5 that Apple is discontinuing that model. The 5C will sell for $550, or $99 with a contract. This isn't a cheap phone. And if the 5C is cheaper for Apple to produce than the 5 would have been -- which seems plausible given its plastic body -- it might even be a way for Apple to boost its profit margins rather than scale them back.

This is a bold move. In the tech business, it's rare -- and perhaps even unprecedented -- for a product to keep its prices steady year after year after year. By holding the line against lower-priced phones, Apple will be able to keep its profit margins high -- and at Apple, profits are sacrosanct, considered more important than sales and market share. But refusing to give an inch on prices is also extremely risky.

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