updated 05:28 am EDT, Wed September 11, 2013
Apple is testing the value proposition of the iPhone 5s
Like many people I am still coming to grips with the reality of Apple's product announcements yesterday after months of rumors (some accurate, some not) leading up to the official unveiling of iPhone 5s and iPhone 5c. While Apple's pricing for the iPhone 5c caught many by surprise (it is not a 'cheap' or a 'budget' iPhone), its pricing of the iPhone 5s is worth scrutinizing too. Although Apple's pricing for the iPhone 5c and iPhone 5s varies from market to market, it is interesting to note than in Australia, an iPhone 5s 64GB will retail for $30 more than a MacBook Air with 128GB.
Yes, you read that correctly. Apple will be selling the new 64GB iPhone 5s in Australia for AU $1,129 off-contract, while at the same time, it is also selling its 128GB 11-inch MacBook Air in Australia for AU $1,099. Given Apple's pricing structure, the only circumstance I would consider getting the new iPhone 5s is if it were subsidized on a two-year plan. However, I don't like entering into contracts with telcos and prefer to buy my phones outright and recycle them through eBay whenever I choose to upgrade.
As a yardstick, Google is currently running out the 16GB Nexus 4 in Australia for AU $299 - it was originally just AU $399 to begin with. By comparison, the 16GB iPhone 5c has been listed as starting from AU $739, while the 16GB iPhone 5s has been listed at AU $869 (like the Nexus 4, these prices are inclusive of Australia's national 10% Goods and Services Tax). When you starting comparing the iPhone 5c, or even the iPhone 5s against the Nexus 4 from a 'bang for your buck' perspective, the Nexus 4 looks like a bargain. Ironically, Apple's own MacBook Air also starts to look like a bargain too.
Time will of course tell if Apple has priced its iPhones correctly, in Australia as well as its numerous other markets around the globe. You could point to the iPhone 4S, which is now the entry-level iPhone as an alternative. However, even though it is now three generations old, Apple is selling the single 8GB model off-contract for a whopping AU $529 - or AU $230 more than the just-turning-12-months-old Google Nexus 4 (with its 4.7-inch 720p display, quad-core processor, and double the storage capacity).
I don't know about you, but I would sooner spend my money on the MacBook Air than the iPhone 5s. It may offer a desktop-class 64-bit A7 processor, but is it really worth a desktop-class price?
By Sanjiv Sathiah
The view presented here are those of the author alone