ICYMI: Apple now offers a free iPhone

Free, not "cheap"

icymi apple now offers a free iphone

Apple now offers a smartphone for everyone with its entry-level iPhone 5C being made available for free, but no one seems too excited about this -- even though it is what everyone said it should do.

Blind spot

That’s likely because in the mind of many who should know better, the iPhone 5C is seen as a "failed product," despite multiple examples proving it never failed at all:

  • The latest sales data from Kantar Worldpanel ComTech shows that the iPhone 5C was the best selling smartphone in the UK in August -- even as the industry awaited the new iPhone range.. (iPhone 5C, 8.9%; iPhone 5Ss, 7.6%; Samsung S5 6%).
  • AppleInsider calculates that the iPhone 5C sold 12.8 million units worldwide in the winter quarter 2013 -- that’s twice as many as all BlackBerry smartphones combined and 3 million more than the then top-of-the range Samsung at the time.

There are many more example to prove that the device wasn't a failed product, Apple was simply careful to position attention at its leading solution.

Just as it is doing this year, when it once again hopes to point all that pent-up demand at its 6 and 6 Plus phones.

Widen the market

You see, Apple's "unashamedly plastic" device didn't get an upgrade this year, just a price cut, and while it makes sense for the company to improve this model at some point, there's no pressure -- the new premium phones are hot stuff, and if you can't afford one, the iPhone 5C is now free.

So everyone can have an iPhone.

One thing the iPhone 5C did do and now does even better is to bring in new customers to the Apple ecosystem. Tim Cook last year said the model was bringing first-time iPhone users in "significant numbers".

Those new iPhone users were flocking to a device with a price tag just $100 under the flagship model -- but now you can get an iPhone 5C for free in some markets and on some carriers, how attractive do you think the product has become to cash-strapped consumers who really wanted an iPhone?

Look at what happened in the UK when value-conscious consumers chose iPhone 5C. The now free phone will now remain hugely popular, despite being a souped-up iPhone 4.

Fresh opportunity

Another great thing is that Apple didn't upgrade the device at its iPhone 6 launch.

Why is that great?

It means Apple has diversified its iPhone range. It now has a model it can (should it choose) upgrade in the middle of its traditional one-year iPhone cycle, which should boost mid-cycle sales.

Why wouldn't Apple upgrade this model? It seems reasonably obvious that as Apple Pay gains market share it will be useful (and profitable) to put TouchID inside as many devices as possible.

Each iterative improvement to Apple's entry-level free iPhone will chip interest away from the company's low-end, low-cost, low-value competitors.

Complete control

In each case, the improvements Apple will be able to apply come from unique technologies over which the company has complete control.

Apple now offers an iPhone for every budget. Blinded by the preconception that the iPhone 5C "failed," I don't think analysts or the media have yet assessed how important this will be in the smartphone wars. And, of course, Samsung is now playing defense, particularly because 13 percent of its customers intended purchasing a new iPhone last month. Samsung's Galaxy is fading fast.

Apple has a free iPhone. And even though it is free, it still isn’t cheap. There are not many big companies who can achieve that.

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Copyright © 2014 IDG Communications, Inc.

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