Apple (NASDAQ:AAPL) introduced its iPhone 5C for $99 with a two-year carrier contract on September 11. Retailers are reducing their prices for the iPhone 5C to as much as 50% weeks after the device became available for sale in the market.
Wal-Mart Stores (NYSE:WMT) was the first retailer in the United States that offered a cheaper price for iPhone 5C during its first day of sales. The retail giant started selling the device with a 20% discount at $79 with a two-year carrier contract. Wal-Mart is further reducing its price for the iPhone 5C for $45 until the holiday season.
On the other hand, Radio Shack Corporation (NYSE:RSH) is offering consumers with a $50 gift card if they purchase the iPhone 5C until November 2. Best Buy (NYSE:BBY) is also offering a $50 gift card, which they can use to purchase other items in the store until October 7. The promotions of the companies require consumers to sign for a two-year carrier contract.
Majority of analysts already projected that the iPhone 5C will not be able to compete well in the market because the price of the device is not cheap enough particularly in emerging markets where consumers do not buy phones with a contract. The iPhone 5C is worth $549 without a contract, which is higher than what analysts expect.
Venture Capitalist Fred Wilson was one of the people who expressed disappointment against Apple with regard to the pricing of the iPhone 5C. According to him, the company was “clues less” regarding the importance of releasing a more affordable iPhone for the emerging markets.
“The C in 5C does not mean ‘cheap’ as I had hoped. It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones. The reality of much of the world is that people don’t sign two year contracts like we do here in the U.S. They buy pre-paid sim cards and stick them into un-subsidized phones. And on that basis, the 5c is a big disappointment,” wrote Wilson in a blog post.
Given the fact that retailers are cutting their prices for the iPhone 5C, it only shows that consumers are not attracted to purchase the device. On the other hand, the price of the iPhone 5S is stil $199 with a two-year contract.
In an interview with ABC News, Stephen Baker, vice president of industry analysis at NPD commented, “I think the 5c has gotten overshadowed and, given that the 5s isn’t available everywhere, this is a way to get people excited about the latest and greatest Apple product.”
