IPhone 5C: C is for Cognitive Illusion

Pricing it low would have the effect of short term financial gain but at the expense of commoditising the iPhone's brand. Which would make people far less willing to spend the extra money on the 5S (which has the larger margins).

That's a western male perspective. In Asia (including India), adults will jump to get those colors. (And women in the West too).

Conjecture: these will be the free-with-contract phones next year, and something else will occupy the $100 slot.

I genuinely think this opinion might be the result of a filter bubble or its "real life" equivalent. I don't care for the bright colors personally, but I think the white 5c looks excellent (a black one would be even better). I still prefer the metal casing (plus the tech specs are important to me), so I'll choose the 5s if I decide to upgrade, but I can absolutely understand why a huge portion of potential buyers would prefer the plastic case, especially people who aren't particularly concerned with having the most blazing new chip or the fingerprint sensor. In fact, even among gadget geeks, I can see many choosing the plastic design specifically because it is plastic. I have heard a lot of disappointment about the fragility of metal iPhones since the debut of the iPhone 4.

It's hardly even that though, at least relative to the product lineups of competitors. For one, the size itself is virtually identical. As the author mentions, the 5c differs very little from the 5 apart from the plastic colorful case. Apple could reasonably maintain to assert the philosophy of "one size fits all," because the form factor and feature set of all their models are still virtually identical, just like they were before the introduction of the 5c.

Also, "iPod Video" actually was the formal name used for the fifth-generation iPod.

Apple has never been able to make enough iPhones of each successive generation for people to get their hands on during the first few months after release. Whereas, once they've ramped up production, they tend to have all these parts left over in the pipeline[1] that they have to sell off as N-1 gen hardware to price-sensitive late adopters. (This is also why the iPod Touch was originally created, to serve as a sink for N-2-gen parts.)

Now, Apple are trying to shift the purchase frenzy to the N-1 gen, and position their new gen-N tech -- whose production hasn't yet been ramped up -- as something for early-adopters only. In other words, to switch from an (N-1, N) view of the world, to an (N, N+1) view.

Everything in the S will filter down to the C of the next gen. They'll get their pipelines saturated with 5S parts just in time to wrap them in plastic and call them 6C parts. As long as more people buy Cs than Ss, this works out perfectly.

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[1] By "in the pipeline", I mean the more general "economically incentivized to produce units of, instead of units of the new model, by contractual obligations to factories, training costs of factory workers, etc." Apple actually keeps their literal pipeline of hardware-produced-but-not-yet-shipped-as-a-product quite low.

Screen sizing is the only place the iPhone might show weakness. Apple is holding the line on smaller phones... we'll see if it continues to work out for them.

There is no point in Apple introducing a brand new truly low cost iPhone because such a device would by necessity only be in the market for a short time before it would get obsoleted. The 5C is set to be manufactured for the next 3 years, so they will extract maximum scale effects and maximum sales volume over the lifetime of the device.

The 'C' may well stand for 'Cheap', but not now. It stands for where it will be positioned over it's lifetime. Other manufacturers bring out a new device and only care about it for maybe 6 months, after which they're on to the new thing and ready to forget the old one ever existed. Apple thinks really long term about their device's full economic life cycle.

For example the iPad Mini was criticism for being too expensive, but that was taking a short term view. I fully expect the current mini to continue to be manufactured at a lower price point for another year, cutting off the air supply to the cut price Android tablet market, but Apple is in no hurry to get to that point.

IMO what we're seeing is only relevant in the developed world. The 5C is being priced as the slightly-cheaper-but-not-by-much alternative to the 5S. But this isn't why the 5C exists - IMO the 5C exists largely because of the developing world, where Apple has the freedom to separate the price points by a much wider gap than in the US/EU.

I'd expect that the 5C-5S price difference to be much more dramatic in China than in the US.

And the 5S might have an amazing camera, but otherwise I don't see why I'm supposed to want it.

It is a deliberate move and the key is now to understand why they did it.

Of course the issue in this argument is the App store. You could argue that by building a huge user base could allow you to shift your profits from hardware to software in the long run.