iPhone 5s Greatly Outselling 5c. Not a Surprise

One might have expected the iPhone 5c, thanks to its lower price to outsell the iPhone 5s. But there are other factors at play, and this is, in fact, not a great surprise.


Sales data obtained by AllThingsD from Consumer Intelligence Research Partners (CIRP) show that, during the last days of September, 64 percent of Apple's iPhone sales were iPhone 5s, 27 percent iPhone 5c, and 9 percent iPhone 4s.

This may have been surprising to some. Does it represent a failure of the iPhone 5c? Should a less expensive iPhone automatically outsell a more expensive one? Those observers and investors who wanted to manipulate Apple into gaining market share against Android with a cheaper iPhone 5c will probably point to this data as evidence of Apple's iPhone 5c failure.

I don't believe that, and here's why.

There are a lot of U.S. Apple customers out there hungry for the latest and greatest. They've been hungry for the new 5s colors, especially gold. They're intrigued by the better camera and Touch ID (fingerprint recognition). They know the 5c is just an iPhone 5 in a colorful, polycarbonate case. The demand for the standard iPhone 5 technology in the U.S. has been sated. So one would expect, in the early days, for the aggressive, high tech buyers to prefer the iPhone 5s. So far, Apple hasn't been able to meet demand, and the waiting time is still two to three weeks.

Then why all the TV ads for the iPhone 5c? Desperation? Not really. There's no point trying to create demand for a product that can't be delivered right away. It's sensible to create demand for a product that's in ready supply, the 5c. That may sound simplistic, but Apple's ads tend to achieve the desired effect or Apple wouldn't run them.

Over time, as Apple catches up with demand for the 5s, and other customers, especially those outside of the U.S., see a value proposition in the colorful iPhone 5c, I expect the percentage of 5c sales to rise. Apple has the liberty to adjust the pricing to nudge that along. Apple's strategy is working nicely.

At this point, any suggestion that the 5c has been a failure just doesn't take into account the market dynamics at this early phase of the product rollouts.


Gold iPhone 5s image via Apple.