I’m going to go off topic a little for this post just because I can’t help but embrace my marketing nerdiness.
Apple announced the release of the iPhone 5c today. It’s the ‘cost effective’ phone option that allows customers to express their personality by offering the phone in 5 colors. This phone also comes with most of the same bells and whistles as the more expensive option. The 5c will cost the consumer about $99.
In my opinion, this is the worst decision that Apple could have made from a marketing standpoint. For starters, they’ve based their entire company around a differentiation strategy and have had incredible success. People wait in line hours upon hours to get their hands on the newest iPhone. It’s the Audi of phones. Making a cheaper option waters this whole strategy down. What makes the more expensive iPhone desirable anymore? Now anyone can own one.
This could go one of two ways:
In the event the 5c proves successful, there’s a huge possibility of product cannibalism. It could eat up sales of the expensive iPhone. Why would I want to buy an expensive iPhone when I can get the same brand and function from a cheaper version? For Apple, this means higher sales of a product with a much lower profit margin. Not a good thing.
The 5c could completely bomb. The iPhone is a status symbol in society. If you have one, you’re seen as tech-savvy with a fair amount of disposable income. The 5c is cheaper, AND it comes in colors. Apple thinks the colors are a selling point, but I think it may hurt them in the long run. These colored phones will serve as neon signs to society reading, “Hey, I had to settle, but I’m still desperately trying to be part of the Apple movement.” It does absolutely no favors for the classiness Apple has established with their previous products; it cheapens it. Besides, they’ve tried this color thing before with the Mac. It didn’t last.
Apple has lost sight of their target market and their marketing strategy. I understand the need to compete with Samsung, but they’ve gone in the wrong direction. As far as the price, I can most likely get a 5 for $99 when it’s time for an upgrade. I won’t be choosing a 5c. I’m anxious to see how this unfolds.
What do you think?
Power In Pearls 