Apple’s iPhone 5c gambit is going (sort of) as planned

Brad Reed
What can we learn from the iPhone 5c and Windows 8 flops?

From a sales perspective, the iPhone 5c looks like a dud… but that doesn’t mean Apple is at all disappointed with it. As we’ve noted in the past, one of Apple’s top goals with the iPhone 5c was to make a lower-cost alternative to the iPhone 5s that would also be much cheaper to produce than the older iPhone 5.

You see, Apple realized last year that many consumers were flocking to buy year-old iPhone models that cost $100 less on contract than the latest flagship model. What’s more, Apple realized that this trend was a potential threat to its margins, which the company has vowed to keep sky-high at all costs.

The solution to this not-really-a-crisis? Stop selling the year old aluminum model and replace it with a plastic version whose materials are $20 to $30 cheaper than the older model and sell it at the exact same on-contract price.

And new research from Consumer Intelligence Research Partners suggests that this gambit has paid off for Apple. As Re/code notes, CIRP’s numbers show that “the iPhone 5c is grabbing less share of the iPhone market than Apple’s iPhone 4s did a year ago when it was the mid-range option” while “the iPhone 5s, by contrast, has grabbed a larger share of the market than the iPhone 5 did in its first full quarter on the market.”

In other words, not only is the iPhone 5c making more money on a per-unit basis than the iPhone 5 would have but it’s also driving more people to pay up for the flagship iPhone 5s, which is only helping Apple’s bottom line even more.

Of course, it’s unlikely that this was Apple’s exact plan for the iPhone 5c. The company plugged enough money into iPhone 5c advertisements to suggest that it really did want it to be a hit among consumers. But if the new device’s brightly colored, shiny plastic cases are driving more potential customers into the arms of the iPhone 5s, Apple certainly won’t complain.

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