Rumor: Apple Will Release a Cheaper iPhone 5C

Source: Apple.com

Apple (NASDAQ:AAPL) will release a cheaper 8GB-capacity iPhone 5C on March 18 in an effort to boost flagging sales of its mid-tier smartphone model, according to leaked documents seen by O2 Germany, reports Engadget. The lower memory-capacity iPhone 5C will allow Apple to price the device in Germany for 509 euros (approximately $709), 60 euros cheaper than the current entry-level 16GB iPhone 5C model. Although the leaked documents only deal specifically with the 8GB iPhone 5C’s launch in Germany, the lower-cost device will presumably also launch in other markets around the world.

The leaked documents are not the only 8GB iPhone 5C evidence that has emerged. Another source also provided Engadget with a purported image of an 8GB iPhone 5C label that showed the device’s UPC code and model number.

The move comes as sales of the iPhone 5C continue to stagnate. According to the latest data from mobile analytics platform Mixpanel, Apple’s iPhone 5C model only accounted for 5.55 percent of the total number of active iPhones. Meanwhile, one out of every five iPhones currently in use is the iPhone 5S model. Last year marked the first time that Apple released two iPhone models simultaneously: the flagship iPhone 5S and the mid-tier iPhone 5C. However, the iPhone 5S proved to be a far better seller than the lower-cost iPhone 5C due to its new features like the Touch ID fingerprint scanner and a 64-bit processor. On the other hand, the iPhone 5C was essentially an iPhone 5 with a new colorful plastic casing.

According to a recent survey conducted by Piper Jaffray analyst Gene Munster, U.S. consumers will likely continue to choose the iPhone 5S over the iPhone 5C in the foreseeable future. According to the survey’s results, 33 percent of U.S. consumers that planned to buy a smartphone in the next three months intended to buy an iPhone 5S. On the other hand, only 6 percent of U.S. consumers that planned to buy a smartphone in the next three months intended to buy an iPhone 5C.

Munster cited several reasons why he believes the iPhone 5C failed to catch on with U.S. consumers. The analyst noted that the 64-bit A7 processor and the Touch ID fingerprint sensor give consumers a “significant value increase in purchasing the 5S.” However, the marketing for the iPhone 5C focused on mostly on the device’s color options, similar to the marketing strategy that Apple used for the iPod. Munster noted that this iPod-inspired strategy didn’t work for the iPhone 5C “because a significant number of smartphone users cover their smartphones with cases.”

It remains to be seen if Apple’s 8GB iPhone 5C will help it to revitalize its overall iPhone 5C sales in Europe and North America or help boost the device’s sales in emerging markets. It is also unknown how the new 8GB iPhone 5C will affect sales of Apple’s legacy iPhone 4S model, which is currently offered for free to customers that sign up for a standard two-year service contract.

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