Reports on Appleinsider.com over the weekend suggest Apple sold out of the launch shipments of the brand-new iPhone 5S in under two days. By Saturday evening, Apple's digital stores in the U.S., U.K., China, and other launch countries were reporting no availability for all nine different variants of the new iPhone 5S, and delivery dates slipped to October.
Now Apple's confirmed the news: In the first three launch days the iPhone 5S and 5C have sold in total over 9 million units. That's nearly twice last year's iPhone 5 launch total of 5 million units, and tops even the most enthusiastic analyst expectations. The new iPhones have broken a sales record, Apple says, and it also notes that over 200 million devices are already running its brand new iOS 7 operating system. That is, so Apple says, "the fastest software upgrade in history."
The iPhone 5C has a polycarbonate wrap-around back. It will come in five colors -- green, white, blue, red, and yellow. The screen wallpaper will match the exterior of the phone.
iPhone 5C (Click Image To Enlarge)
Separately a report from analytics firm Localytics places the sales figure in context. Localytics has been looking at telltale signature data from the new iPhone 5S and 5C and has concluded the two phones are already accounting for close to 1.5% of all U.S. iPhones in use. Globally, the firm estimates the new phones, which are only on sale in 10 nations, make up 1% of all iPhones in use. The 5S is outselling the 5C, the company thinks.
Apple's iPhone sales are so strong that the company has taken the unusual step of issuing updated financial guidance, noting in an SEC filing that,
"Apple expects total company revenue for the fourth fiscal quarter to be near the high end of the previously provided range of $34 billion to $37 billion, and expects gross margin to be near the high end of the previously provided range of 36% to 37%."
What Apple's felt the need to do is to alert its investors of the iPhone success so that they aren't caught on the hop when the company reports its next financial data to be much higher than expected. This could imply that even Apple has been surprised by the scale of the iPhone sales.
COMMENTARY:
Strong iPhone 5S Sales Predicted For Q4 Predicted
According to mobile analyst Michael Walkley of Canaccord Genuity, Apple could sell as many as 51.5 million iPhones during the holiday quarter.
In an investors note out Tuesday, Walkley said he expects strong sales of the iPhone 5S through December as Apple bumps up supply to meet the heavy demand. The more expensive 5S is currently outselling the 5C by a ratio of 2.5 to 1, according to the analyst.
Apple reported total iPhone sales of 33.8 million iPhones last quarter and 47.8 million in the final quarter of 2012.
iPhone 5C Sales Over-Estimated
Was Steve Jobs right about not selling iPhones to the low-end of the market, and was Tim Cook wrong in pursuing that market with the lower-priced iPhone 5C?
Bloomberg’s Adam Satariano after pointing out the Apple co-founder famously “emphasized high-end consumer gadgets over cheaper ones,” writes:
“Last month, [Apple CEO] Tim Cook introduced the colorful iPhone 5c, a less-expensive version of Apple’s smartphone, to ‘serve even more customers’ around the world. It turns out people so far are more interested in its pricier, feature-rich cousin, the 5s.”
Satariano is following up on a report by the Wall Street Journal’s Lorraine Luk, Eva Dou and Ian Sheer (among others), earlier this week that Apple reportedly reduced orders for the 5c device from its suppliers and that “retailers and telecom operators report tepid demand for the device, prompting some to cut prices.”
This despite heavy advertising for the 5c, which retails for roughly $100 less than 5s models, although specifics vary by market.
Satariano writes.
“A recent Consumer Intelligence Research Partners survey reported that '64% of U.S. iPhone customers were buying the iPhone 5s, which sports a better camera, faster processor chip and fingerprint-reading security features and starts at $199 with a carrier contract.'"
The iPhone 5c has been bought by 27% of buyers, according to the survey. Earlier versions of the phone are also available.
In fairness to CEO Cook, who said during an earnings call, as AllThingsD’s John Paczkowski reported earlier this week.
“I don’t subscribe to the common view that the higher end, if you will, of the smartphone market is at its peak.”
Cook said for emphasis.
“I don’t believe that.”
CNN Tech’s Doug Gross, in a piece that asks, “Is Apple’s iPhone 5c a Flop?,” advances the argument that the price may still be too much in emerging markets but that the differential between the new models may not be enough in markets like the U.S.
Gross reports.
“In China, where phones aren't subsidized by mobile carriers, the 5c is selling for 3,500 yuan, or about $560.”
Gross also says.
"But in the U.S., where it’s available for $99 as long as consumers sign a contract, the 5C doesn't sport features significantly upgraded from the iPhone 5, which can be had for as low as $199. The two-year-old iPhone 4s can be had for free with a data plan.”
Forrester Research analyst Sarah Rotman Epps tells Gross.
"Apple needs new customers to keep growing, and the 5C was supposed to appeal to a new, more price-conscious consumer. Turns out that acquisition is a lot harder than retention."
Reuters’ Clare Jim and Paul Carsten point out.
"At least in the short term, the decision by consumers to spend more on the pricier 5s benefits Apple. The company's shares rose on Wednesday, touching a one-month high above $502.”
And they also pass along a caution by analysts and Apple executives about “reading too much into supply chain adjustments, which are common in the fast-moving electronics industry.”
Meanwhile, critics are also buffeting Apple’s new mobile-device operating system.
Raluca Budiu, senior researcher Nielsen Norman Group tells USA Today’s Scott Martin and Alistair Barr.
“It's Apple's most problematic operating system launch so far."
The consultancy’s recent report about the “move away from the skeuomorphic design that characterized earlier versions of iOS” finds “some of the new features are welcome usability improvements, whereas others are likely to cause pain.”
Among the discomforting features, Martin and Barr report, are “buttons that used to stand out now blend with the background, and links that used to be visible may now be mistaken for plain text, the consulting firm said.”
Functionally, text messaging via the built-in iMessage app apparently isn’t what it used to be on the new OS, leaving “users fuming,” and “some users of Apple's new flagship iPhone 5s have even experienced a so-called blue screen of death, familiar to many who have seen a Windows computer screen freeze and turn blue.” Not to mention “flawed results” from the motion sensors — you may know them as the accelerometer, inclinometer and gyroscope.
iPhone 5C and 5S Specifications
For those readers interested in the iPhone 5C and 5S technical specifications, check this out.
Click Image To Enlarge
For more detailed iPhone 5S and 5C technical specifications refer to GDGT1 and GDGT2.
Courtesy of an article dated September 23, 2013 appearing in Fast Company and an article dated October 29, 2013 appearing in C|NET and an article dated October 18, 2013 appearing in MediaPost Publications Marketing Daily
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