Earlier this month Apple announced two new iPhones, along with general availability of its latest mobile operating system, iOS 7. Like most recent Apple announcements, many of the details about the event were known in advance: a feature upgrade to the flagship iPhone 5, in the guise of the iPhone 5S, and a new iPhone 5C. Pundits predicted most of the new features of the 5S, including the fingerprint scanner and improved processor. The 5C, however, was a bit more mysterious, with the “C” representing perhaps a cheaper iPhone to capture the low-end market — or China, as a bit to capture market share in the world’s fastest growing smartphone market. What Apple unveiled was a bit different, either an astute move on behalf of the company or a cry for relevance as the innovator faces growing skepticism.
The power of plastic
Rather than a dramatically different lower-end phone, the 5C is essentially last year’s iPhone 5 hardware wrapped in a plastic case. Apple’s usual hyperbole made it sound as if this were the world’s first plastic phone with an internal metal frame, but we’ve been seeing this type of construction for years. In essence, Apple has taken last year’s phone, employed a cheaper manufacturing method, and kept the price largely unchanged from last year’s model.
If you’re a supply chain person, you can’t help but see the genius behind the 5C. You’re recycling an older design and using components that have become less costly than a year ago, employing a lower-cost manufacturing method, wrapping it all up in some colorful plastic, and delivering last year’s phone at an even higher margin. This is not an unfamiliar tactic, with Apple having recycled various iPod designs with little more than new colors to great success.
Genius or cry for relevance?
What’s different now is that Apple is no longer dominating the market. With the iPod, Apple was the only game in town for a high-capacity, well-integrated music player. New colors sated a market that knew no superior alternative. In the current smartphone market, however, Android presents a world of devices in different form factors and styles. Even Apple’s collection of funky colors looks a bit dated in the context of devices like the Moto X from Motorola, where consumers can design custom parts for the phone, including a wooden shell for the device.
Once the innovator and “cool” device, staid executives now pull out iPhones instead of BlackBerries, and the muted industrial design has lost some of its luster with the fashionable and trendsetting crowd. Apple’s color gambit with the 5C may restore some of the “hip” to the product without introducing a fundamentally new device.
Even on the software side, Apple’s latest iOS 7 adds window dressing, some feature parity with competitors, and a Pandora-like music service. Nice additions to be sure, but nothing to set the world alight.
Whether the 5C is genius or merely buying time for a major update to iOS hardware, a company once renowned for innovation seems to be losing its magic. On the flip side, a mature and reliable product that’s grown increasingly enterprise-friendly makes for a compelling platform for enterprise users. However, in an increasingly consumer-driven world, a solid and unchanging platform may not be the best strategy. Just ask BlackBerry.
Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at firstname.lastname@example.org, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.