Analysts cite misguided Chinese launch and mistaken consumer expectation as factors in 5C’s struggling sales

Apple boosts iPhone 5S production, drops 5C production – NPD

Analysts have ‘confirmed’ that Apple has increased production of the iPhone 5S by 75 per cent, while dropping 5C production by 25 per cent.

Posted by NPD analysts on the DisplaySearch blog, the article cites two factors for the iPhone 5C’s struggling sales: a misguided launch of the phone in China and mistaken consumer expectation about the price of the “cheap” phone.

“The company could have sold the 5C at a much lower price (as the market expected); however, Chinese carriers were aggressively gaining new subscribers through device subsidies during Golden Week (first week of October). If Chinese carriers allocated a higher subsidy to new iPhone 5C subscribers, they would have less to subsidize other brands’ devices,” the blog commented on the “disappointing performance” of the 5C in China.

“Second, the market’s expectation of what the iPhone 5C would be was very different from how Apple wants to position itself. It was not Apple’s intention to develop a product targeting the “low-cost” smartphone segment. However, rumors about iPhone 5C being “cheap” were circulating as early as Q3 2012. The fact that the iPhone 5C is nearly identical to the iPhone 5 – and is not cheap – disappointed some consumers,” it added.

While the 5S seems to be more popular than the 5C, it might struggle itself against older iPhones that have built up a ‘retro’ appeal – with one first-generation 2G model listed on eBay for nearly £4,000.

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