updated 01:00 am EDT, Wed July 23, 2014
Colorful iPhone model continues to be among best-selling smartphones
One of the most surprising things analysts heard on Tuesday in Apple's quarterly earnings conference call that was low on surprises was that year-over-year growth of the iPhone 5c is strong -- so strong, in fact, that its share gain outpaced that of its previous-year rival in the mid-tier "slot" in Apple's lineup, the iPhone 4S, at the same point in the previous cycle. In fact, Apple CEO Tim Cook told analysts that it even outpaced the growth rate of the iPhone 5s vs the iPhone 5, and the 4S versus the iPhone 4, each in their respective tiers.
Despite being one of the world's top-selling smartphone models, the iPhone 5c gets a largely-inaccurate reputation as a poor seller, at least by Apple standards -- when in fact it has consistently outsold the iPhone 4S at the same point in the previous product cycle, when it was the mid-tier model. A recent survey ranked the 5c as the fifth most-popular smartphone model in the world, trailing only the iPhone 5s (at the number-one position) and Samsung's flagship devices, the Galaxy S4, S5 and Note 3.
While there is evidence that Apple underestimated the strength of demand for the $100 more expensive iPhone 5s at first, the "mistake" only boosted sales of the more profitable and higher-end model, with Apple having erred primarily overstuffing the 5s with better features for the modest price increase, making the iPhone 5c look lackluster by comparison. Cook's said he was "extremely happy" with where the iPhone 5c was presently, as the $99-with-contract offering.
Apart from some minor differences, the iPhone 5c is essentially the same device as the iPhone 5, but with a colorful plastic (bolstered with a steel frame) backing rather than the aluminum-and-glass construction of the iPhone 5. Both lack the A7 processor, better camera and Touch ID features of the iPhone 5s, the latter of which was particularly-prized feature that has helped keep the 5s at the top of the charts, even as newer flagship devices such as the Galaxy S5 and HTC One M8 among others have debuted.
Cook admitted early in 2014 that the iPhone 5c had not sold quite as well as the company expected overall, but evidence has pointed to the device selling better in recent quarters, particularly as demand for the 5s has fallen due to some customers waiting for the next iPhone. With the introduction of faster-upgrade plans from US and other carriers, Cook said later in the call, the ability to switch to iOS from Android or for users of older iPhones to upgrade "caters to our customers" -- and may present the 5c as a modestly-priced option that gives buyers all the core features, as well as one of the phone's most attractive features -- access to the iOS ecosystem.
Apple sold a record number of iPhones overall in the June quarter this year -- a 12.7 percent year-over-year growth to 35.2 million units, but barely met analyst expectations for sales. Crucially, however, iPhone sales gained strength in the BRIC developing markets (Brazil, Russia, India, China), which may allay investor fears of increased competition and a maturing North American market.
Sales figures for the iPhone 5c in and of itself are not broken out by Apple, leaving the figure as an exercise for analysts to speculate on. An unconfirmed report from last quarter claimed that the iPhone 4S -- a two-year-old model mostly sold in developing markets, but available as the "free-with-contract" option in North America -- may have accounted for as much as 25 percent of iPhone sales.
It's more likely, in light of Cook's upbeat report, to assume that the 5c may have been the iPhone model that did that well on its own rather than the 4S. Despite attempts by pundits to paint the iPhone 5c as a outright or even relative "failure" for Apple, it outsells every Windows Phone model, every Blackberry, and every Android model from every manufacturer available, apart from the three premium Samsung devices.