Analysts Lower iPhone 5c Sales Projections Over Demand Concerns

The iPhone 5c may be a new phone, but the buzz is around the iPhone 5s, as buyers are after the premium product from a premium brand. How does this affect Apple — is it part of the company’s long-term plans?

Before the iPhone 5c was launched, the whole blogosphere was talking about a lower-cost version of the high-end gadget. The bubble burst when Apple presented the colourful gadget and its pricing: $99 on contract ($129 in Canada), and the unlocked version sells for $550 (CDN$599). For those awaiting a cheap phone, this came as a disappointment. The iPhone 5s, however, was love at first sight for many, especially the gold version.

While the first-weekend sales numbers were staggering, breaking all previous records with 9 million iPhones sold, analysts were concerned about the iPhone 5c sales, which, according to the available information, has higher margins than the high-end iPhone 5s. So, from an investor’s perspective, high iPhone 5c sales seem to be a priority.

But what do consumers think about it? Well, as the first surveys show, things aren’t looking too bright for Apple: the iPhone 5s outsold the 5c globally by 3.7 to 1. Furthermore, as the CIRP study points out, 64% of all iPhone buyers have opted for the 5s, while the 5c was the choice of only 27%.

The consumer’s reaction is somewhat understandable: all Apple did was to pack the year-old model into a beautiful colourful plastic shell, and sell it as a new device, suggests Gene Munster of Piper Jaffray. From a consumer’s perspective, the 5c isn’t new, because it doesn’t sport the upgrades its high-end cousin does, he says.

However, we mustn’t forget that these surveys reflect only the first wave of buyers in 11 countries – although, as we can see from our non-scientific survey, our readers aren’t too interested in the 5c. Apple is preparing to launch the handsets in another 35 countries next Friday, and then in a further dozen or more on November 1. This could easily change the picture in the long run. Or not.

“By definition, the 5c would not sell well to customers who queue overnight on launch day — it ought to be more of a slow burn,” Benedict Evans, an analyst at Enders Analysis in London said in an e-mail to Bloomberg. “That means that it could be selling according to plan and still be outsold by the 5s this month. The question is what happens in six months’ time — does it fall off with the 5s or remain steady?”

The market’s early reaction to the iPhone launch shows that Steve Jobs was right: what consumers want is high-end gadgets instead of cheaper ones.