Ask my mom: The iPhone 5C is no cheap knock-off

11 Sep

iphone-5cWhen I was in the fifth grade, my mother perpetrated the worst kind of atrocity one could on a 10-year-old kid: she bought me a pair of Converse jogging pants, sort of. This was actually a great development. Converse was the hot brand at the time, and yes of course, jogging pants were haute couture to fifth graders. I wore my new duds to school with exuberance and swaggered up to my friends with a “check out what I got” cockiness.

And then they laughed at me. Heartily.

“What the hell is going on?” I asked with exasperation. “Have you read what your pants say?” they replied.

According to the style, Converse’s brand was splashed down the left pant leg in its trademark font. In my exuberance that my mother had finally got me the cool pants I’d always wanted, I never actually bothered to fact-check her purchase. To my horror, the pants read “Conserve,” not “Converse.”

Clearly, I had been duped. My mother had bought cheap knock-offs at some discount store and then tried to pass them off as the genuine article to a child that was too stupid to notice. Of course I never wore the pants again and the whole situation is a large part of the reason why, to this day, I still don’t trust my mother.

I thought I’d relate that story because I was asked in a number of post-iPhone-event interviews whether Apple was devaluing its brand by introducing two separate devices, one of which is clearly positioned to be lower-end. I saw at least one Twitter comment to that extent – that children will be ashamed to bring their $99 iPhone 5C, which is basically a clone of the existing iPhone 5 but with a plastic body, to school because it will stigmatize them as having cheap or less-well-off parents.

In other words, could the iPhone 5C be the Conserve of phones?

Despite my obviously deep-rooted psychological baggage on this issue, I don’t think so. The world of laptops, where Apple is the premium brand regardless of category, is a good example for why not.

MacBook Pros with Retina displays start at $1,499, while MacBook Airs start at $999. In both cases, the respective computers are considered to be top of the line – one in the high-end powerhouse category, the other in the ultra-portable. So even though laptops are one category of device, there are actually at least two sub-categories – and Apple rules them both.

The smartphone market is seeing a similar development, with lower-end and high-end sub-categories emerging. The iPhone 5S, selling for $199 on a two-year contract with its faster processor, better camera and fingerprint scanner, is catering to the traditional buyer Apple has always gone after. The 5C, meanwhile, is going for those people who don’t yet have a smartphone or who have secretly always wanted an iPhone but weren’t prepared to pay extra for it.

J.P. Morgan had an interesting chart a few months ago that showed where the smartphone market was going. Most sales are happening either at the high- or the low-end, with not much in the middle. The 5C, with an off-contract price starting at $549, still falls on the high end of that chart, while the 5S will start at $649. That’s only a $100 difference.

In other words, don’t let the low on-contract price fool you – the iPhone 5C is no cheap knockoff. Apple is clearly looking to be the premium brand in both phone sub-categories, which are actually not that far apart. That’s good news for fifth graders everywhere.


Posted by on September 11, 2013 in apple, iphone


4 responses to “Ask my mom: The iPhone 5C is no cheap knock-off

  1. Chris C.

    September 11, 2013 at 12:16 am

    “J.P. Morgan had an interesting chart a few months ago that showed where the smartphone market was going. Most sales are happening either at the high- or the low-end, with not much in the middle”… Does anyone need more proof that the middle class is dying out and that the world is polarizing into the minority of haves and the majority of have nots?

    But don’t fret, there is still life in the not-pole position. As a matter of fact, I have found out that there is actually plenty of value in the low end. I checked laptops last week and to be honest, I could very well live with a $600 machine even if a $2000 would give me bragging rights. because in the end, just like with cars, how many times do you really find yourself needing that extra horsepower and convenience the bleeding edge device gives you?

    So, in the end… The insecure and the rich get to pay the most for not much extra value while the bulk of us end up getting pretty good stuff at reasonable prices 😉

  2. Marc Venot

    September 11, 2013 at 1:56 am

    The price of the 5C is too high but the aim at first is to buy back the old gizmos so Apple can offer a sweet price for them.

  3. E.T. phone home (if you can afford to)

    September 11, 2013 at 10:39 am

    I love that Apple is charging $70 more for all versions of the 5s in Canada when the exchange rate is about $20-$30. Canadians subsidizing Americans again.

    While $100 doesn’t seem like much of a difference when you’re paying full price, it looks like more of an advantage when under contract. And to some people, that $100 could be the difference between getting an iPhone or an Android.

    But let’s not underestimate children’s cruelty. It might be that the colourful phone with the two-tone case is cool, or it might be the object of derision. I would not want to guess which way that wind will blow.

  4. Chris C.

    September 11, 2013 at 3:24 pm

    @E.T. Phone Home: About the entrenched tradition of gouging Canadian consumers, Like a buddy of mine who buys all his car parts from the US says, business here is in fact no different from organized crime, whose motto in this case is “obtaining fair value for a product is forbidden thought”… Seriously, Man, there are people who really think that getting the best value for your money is sign of mental disease! As these are usually the same people who believe war is good for us and wasting our resources is just a normal consequence of abundance, you can well imagine how much credibility they have in y eyes 😉

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