When Apple’s new iPhones, iPhone 5c and iPhone5s, became on sale for customers on September 20th, they became 2 of the top 3 smartphones for four different carriers (AT&T, Verizon, Sprint and T-Mobile). However, despite the 9 million shipments being made, there were still doubts on the success of sales of these iPhones due to the large price cuts made by both Best Buy ($50 discount) and WalMart ($45 discount).

Although the price cuts are associated with the need to get rid of inventory for the lack of sales, there could also be a positive explanation for large discounts. It could be that they’re  trading “some of their profit margins in exchange for a higher share of sales for a hot new product.” (All Things D’s Ina Fred).

The discount could be an incentive for customers to buy more of the products and sign up for the phone plans, becoming a regular customer.

Citation:

Sparks, Daniel. “Apple’s iPhone 5c sales may be faring well after all”. 8 October, 2013. http://www.fool.com/investing/general/2013/10/08/apples-iphone-5c-sales-may-be-faring-well-after-al.aspx