Tim Cook is sorry if you’re disappointed that the iPhone 5c isn’t a budget phone aimed at consumers in emerging markets but he never meant to give you the impression that it would be. In an interview with Bloomberg Businessweek, Cook says that Apple “never had an objective to sell a low-cost phone” that would compete on some level with the dirt-cheap Android handsets that have been flooding into emerging markets. Instead, Cook says that the goal with the iPhone 5c was “to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost.”
While it’s true that Apple is simply not built to compete on the very low end of the market — “We’re not in the junk business,” as Cook tells Bloomberg Businessweek — many analysts were expecting the lower-cost iPhone to sell for $450 off contract at most and not the $550 off-contract price that the company announced earlier this month. This has led to a drop in Apple’s share price since the iPhone 5c launch because investors believed that Apple’s new device would at least have a mid-range price that would make it more attractive to consumers in China, India and Brazil. As things stand now, however, the iPhone 5c seems to have little hope of cracking key emerging markets at its opening price point.
“It raises the question: Is Apple truly a mass-market provider?” Enders Analysis analyst Benedict Evans tells Bloomberg Businessweek. “Or do they wind up with 40 percent of the U.S. market, a third of Europe, and nothing anywhere else?”
