Apple Inc co-founder Steve Jobs may just have been proven right with his strong emphasis on Apple to focus on high-end consumer gadgets over cheaper ones.
In September, Apple Inc CEO Tim Cook introduced the colorful iPhone 5C which is a cheaper version of Apple's premium smart phone to reach more customers around the world. This may be the initial plan but data suggests customers want the more expensive, feature-rich iPhone 5S.
Three surveys that came out in the last two weeks suggest that the iPhone 5S outsells the iPhone 5C at least 2 to 1. Brokerage firm KGI Securities Co. has announced it was cutting its estimates for the quarterly sales of Apple's iPhone 5C by a third.
US retailers like Wal-Mart and Target Corp. have cut the iPhone 5C's price to attract more customers to buy the cheaper iPhone.
The Wall Street Journal has reported that Apple Inc has reduced its orders of iPhone 5C from its suppliers which strongly indicated that the iPhone 5S is more in demand than the 5C.
It would seem that consumers are ignoring the $99 price of the iPhone 5C despite Apple's big budget to market and advertise the colorful smartphone. Many considered the iPhone 5C as just an iPhone 5 repackaged in a more colorful case.
The iPhone 5C was launched by Apple to attract customers in developing markets like China where companies like Samsung and other Chinese phone manufacturers are currently leading.
Despite the seemingly low sales of the iPhone 5C, Apple Inc stands to generate bigger revenues and higher margins from its best-selling iPhone 5S.
Oracle Investment Research analyst Laurence Balter said Apple consumers are "still interested in premium products from a premium brand". He said the iPhone 5C may be a "failed experiment" to please the demands of the masses for a cheaper iPhone. He also believes that Apple Inc should do what it does best. He said Apple should stay focused on the premium smart phone market and leave the low-end market to Samsung.
Consumer Intelligence Research Partners LLC released a survey with results indicating that 64 per cent of iPhone users in the US were buying Apple's premium iPhone 5S; only 27 per cent of US buyers preferred the iPhone 5C.
The early results of the survey may just have proven analysts and investors that Apple has priced the iPhone 5C too high to attract customers who want an iPhone but cannot afford to pay the price. Analysts also believe that the iPhone 5C may be struggling with the image of a lower quality iPhone.
Wedge Partners analyst Brian Blair said Apple is increasing the production of the iPhone 5S but the numbers may not cover the low iPhone 5C sales.
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