When it launched the iPhone 5c this year, Apple broke its long-standing tradition of keeping its most recent high-end iPhone model on the market and selling it out a discount. And now we have a good idea of why: It’s all about money. AllThingsD points us to a recent iPhone teardown conducted by IHS estimating that it costs between $173 and $183 to build an iPhone 5c, which means that it’s around $20 to $30 cheaper per unit to build than the now-discontinued iPhone 5. The math for Apple is pretty obvious in this case: It could either keep producing a hard-to-build high-end model and sell it on contract for $100 as it’s done with other older iPhones, or it could produce an easier-to-build model for less money and sell it at the same on-contract price. Seen from this perspective, it’s easy to see why Apple isn’t too worried about the 5c cutting into its margins anytime soon.
This is the No.1 reason why Apple is replacing the iPhone 5 with the 5c
Published Sep 24th, 2013 11:05AM EDT
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Brad Reed has written about technology for over eight years at BGR.com and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.
