Apple's iPhone 5S and 5C Debut and its Strategic Implications

September 2013 | 10 pages | ID: A314B7A9B36EN
Market Intelligence & Consulting Institute (MIC)

Abstracts

On September 10, 2013, Apple revealed two distinct iPhones, high-end 5S and cheaper 5C, at the same time during an event held at the company's US headquarters, breaking its one-a-year iPhone strategy. In the face of the saturating smartphone market and dwindling growth momentum of the higher-priced smartphones, Apple this year has opted to change its product strategy. This report examines Apple's strategy shift and its implications for the company in terms of product deployment, partnerships and product pricing.

Contents

1.IPHONE ASP DROPS SIGNIFICANTLY AS GROWTH MOMENTUM OF HIGH-END SMARTPHONES FADES

2. BREAKING ONE-A-YEAR STRATEGY AIMS FOR PROFIT INCREASE

2.1 Major Innovations in Hardware
2.2 Pricing Strategy

3. PLACING FOCUS ON THE ASIA PACIFIC MARKET TO CLAW BACK MARKET SHARE6

APPENDIX

List Of Tables

LIST OF TABLES

Table 1 Comparison of iPhone 5, 5S and 5C
Table 2 iPhone Price Variations Following the Launch of New iPhone, 2010 - 2013
Table 3 Estimated iPhone Price Variations if Standalone iPhone 5C is Priced at US$450
Table 4 Countries Included in the First Round Release of iPhones

About

iPhone ASP Drops Significantly as Growth Momentum of High-end Smartphones Fades

MIC (Market Intelligence & Consulting Institute) estimates that shipment share of smartphones priced over US$450 will slip to 44.2% in 2013, down from 51.4% in 2012, as the smartphone penetration rates in mature countries like Europe and the United States have topped over 50%.

Breaking One-a-year Strategy Aims for Profit Increase

During the event, Apple broke its one-a-year rule for iPhones and unveiled two models at a time, dubbed iPhone 5S and 5C, with the price tag of US$649 and US$549, respectively.

Major Innovations in Hardware

As for hardware innovations, the most innovated features that gain public spotlights are A7 processor, M7 coprocessor and fingerprint identity sensor which are all embedded in the iPhone 5S, Apple's latest flagship.

Pricing Strategy

Prior to the release of iPhone 5S and 5C, due to the leaked information, many consumers have learnt that the company would launch two new iPhones this year.

Placing Focus on the Asia Pacific Market to Claw Back Market Share

Despite the less expected pricing strategy, Apple has made considerable efforts to gain back its market share, like expanding partnerships with telecom operators and adding China to the list of countries getting new iPhones in the first round release.