blog post 1
Releasing cheaper iPhones might not be a wise decision
Apple Inc. recently released two new iPhones, including iPhone 5S and iPhone 5C — the former one has a faster processor and a fingerprint sensor for security, while the latter one has colorful cases and a cheaper price. However, the low cost iPhone can probably cheapen the brand of iPhone, although it may generate additional sales. IPhone was one of the most successful new products ever launched for it belongs to a new category called “touchscreen smartphones” which was considered more advanced than existing keyboard smartphones. The next development, a development that happens to every new category, is that the category divides into two categories — high end and low end. Any brand that tries to both ends of the market is bound to suffer. Also, it is possible that we cannot see throngs of budget-conscious consumers to line up for the iPhone 5C. That is because the supposedly cheap iPhone 5C is not really cheap. The 16GB model retails for $99 with a two-year service contract, and $549 without a subsidy. Tack on an additional $100 for the 32GB model. The rationale is that the more affordable model would better compete in markets where consumers don’t sign contracts and pay an unsubsidized rate for their smartphones. It’s in these markets where the flagship iPhone struggles, and where Apple has to try harder to win over consumers.
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References:
http://news.cnet.com/8301-13579_3-57602328-37/apples-iphone-5c-misses-the-low-cost-mark/
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