Apple made a lot of compromises in designing the 5C to make it cheaper, but they completely failed to make it cheap! It's still more than two and a half times the price of a Nexus 4 unlocked. Unlocked sales for the 5C will be pitiful. Under a multi-year contract the 5C isn't substantially cheaper than the 5S, so people who want the best phone will shun it. The iPhone 5C is going to fail utterly in the market segment it's designed for.

However, I do see a couple of possible markets where the 5C may succeed. There's the Hello Kitty "anything in pastels is squeeeeee" crowd. This market includes little girls, people buying phones for little girls, and Josh Kerr apparently. IF the 5C proves more durable than the 5S it might also capture the tough-wear crowd that wants a phone that doesn't have to be hidden inside a giant blob of silicone to survive a 6" fall onto concrete. Let's face it, not many people are going to want the cases Apple is trying to sell for the 5C. I'm just speculating about the 5C's durability though. Plastic phones might not feel as nice in the hand, but if they use high quality plastic and are well built they do tend to survive better than phones made entirely out of metal and glass.

Will it sell? Never underestimate the Hello Kitty crowd!