Whatever critics might say about new iPhone, public seems to love it.. Kudos to Apple to continue delivering such a great product which keeps on meeting expectation or I should say keeps on beating expectations of critics and every common sense..
It is amazing to see how quickly these phones evaporates or seems to evaporate.. I am sure this is also Apple's marketing strategy to make them evaporate.. but that is minor or small part of all the story..
Bigger piece of story is Apple's pricing strategy.. Everyone was hoping for cheaper iPhone as part in iPhone product line up.. but in my view, Apple has done exactly opposite.. they have increased price (or at least margins) on so called older generation phone.. To understand this, you have to compare last year's launch.. Till last year, Apple used to reduce price of previous generation iPhone by $100. This year, they officially removed previous generation (iPhone5) and instead of launched iPhone5c. Which in-fact is iPhone5 from inside. Only thing different is that it has now even cheaper plastic back (though in beautiful bright colors) thus reducing cost of manufacturing of this so called iPhone5.
Essentially, Apple has launched same phone but increased price realization. So, Apple's strategy is very simple:
In my view, it is brilliant pricing strategy and it will continue Apple as true leader in smartphone space.. They may not be leader by volume but I am sure they will continue their lead by other metrics such as actual usage and apps/music/videos etc..
Nevertheless, people are enjoying their new iPhones.. I am guessing this next quarter is going to be stellar quarter for Apple with significant jump in their profitability leading to significant jump in their share prices!!
JANE TYSKA/STAFF PHOTOS
CEO Tim Cook celebrates the release of the new iPhones as he leaves the Apple Store on University Avenue in Palo Alto.
Dorothy Arndt, left, and veteran Bob Younger, of San Jose, showed up in Palo Alto along with a group from Gift A Vet, an organization supporting veterans in need. Arndt left the store with an iPhone 5S to give to a 53-year-old disabled Santa Clara County veteran.
==========================================================================
Spectrum of colors
First in line to meet Cook and get the new iPhone was a group from San Jose-based Gift A Vet, an organization dedicated to supporting veterans in need. Dorothy Arndt said she had been camped out since Monday, trading 12hour shifts with vets and colleagues. She left the store with a 16GB iPhone 5S in “space gray” to give to a 53-year-old disabled Santa Clara County veteran struggling to make ends meet on public assistance.
The iPhone 5S rolled out in metallic colors and with super-speedy processing power and upgraded camera features, and the lower-cost, heavier iPhone 5C is offered in a spectrum of candy-coated colors. Along with the U.S., Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the U.K. launched the iPhone 5S and 5C on Friday. But Apple released only a limited number of the coveted iPhone 5S for the worldwide launch and only a handful of those in gold — the color that most fans were lusting after. “Everyone wanted gold,” said Benjamin Smith of Sunnyvale, who settled for gray at the University Avenue store. The iPhone 5C was more plentiful, but few fans were willing to pull out their credit cards for what some have called a repackaged version of the older iPhone 5, dressed in colorful plastic. It starts at $99.
Megan Davidson, 21, arrived at the Sprint store in Palo Alto at 3:45 a.m., where she avoided the crowd at the Apple store and was first in line for the 5S. “I think the 5C is more geared toward kids and cheaper,” she said. “I want the legit Apple phone.”
Gold is first to go
Shortages of the iPhone 5S were apparent in stores across the Peninsula, with websites showing shipments delayed until October. The location at Stanford Shopping Center ran out of unlocked units — phones sold without the software code that limits them to work only on one wireless carrier — before 9:30 a.m. An employee said the gold phones were first to go and the store had “a very limited number.” The Best Buy on Almaden Expressway in San Jose had 28 units of the 5S and sold out before 11:30 a.m., said store manager Mark Fragoza. The store had more than twice as many phones when the iPhone 5 launched last year. The picture wasn’t much better on the other side of the pond. Carriers in the U.K. told the BBC there was a severe shortage of the iPhone 5S, and customers in Asia and Australia were told they’ll have to wait until October.
“Demand for the new iPhones has been incredible and we are currently sold out or have limited supply of certain iPhone 5S models in some stores,” Apple spokesman Bill Evans said Friday.
Opening sales crucial
Opening-weekend sales are crucial for Apple after about a year without releasing a new device while rivals have begun to chip away at Apple’s dominance in the smartphone market. Piper Jaffray analyst Gene Munster said in a note to investors he expected Apple would sell 5 million to 6 million iPhones, including pre-sale orders that started Sept. 13. BTIG analyst Walter Piecyk wrote that he was encouraged because “lines were the strongest we have seen at both Apple and carrier stores” but wouldn’t know until Monday if unit sales would meet his expectations of 6 million during launch weekend. Apple has reportedly asked its suppliers to increase production of the gold-colored iPhone 5S by an additional one-third after seeing strong demand, people familiar with the situation told The Wall Street Journal on Thursday. What remains unclear is whether there are still manufacturing constraints that may keep supplies low. Apple did not respond to questions Friday about production.
Contact Heather Somerville at 510-208-6413. Follow her at Twitter.com/heathersomervil.
===================================================
JANE TYSKA/STAFF
Hoa Tran, of San Jose, leaves with a new iPhone at the Apple Store on University Avenue in Palo Alto on Friday. Customers were lined up around the block.
It is amazing to see how quickly these phones evaporates or seems to evaporate.. I am sure this is also Apple's marketing strategy to make them evaporate.. but that is minor or small part of all the story..
Bigger piece of story is Apple's pricing strategy.. Everyone was hoping for cheaper iPhone as part in iPhone product line up.. but in my view, Apple has done exactly opposite.. they have increased price (or at least margins) on so called older generation phone.. To understand this, you have to compare last year's launch.. Till last year, Apple used to reduce price of previous generation iPhone by $100. This year, they officially removed previous generation (iPhone5) and instead of launched iPhone5c. Which in-fact is iPhone5 from inside. Only thing different is that it has now even cheaper plastic back (though in beautiful bright colors) thus reducing cost of manufacturing of this so called iPhone5.
Essentially, Apple has launched same phone but increased price realization. So, Apple's strategy is very simple:
- They are NOT going to launch cheaper iPhone. They will maintain their premium pricing position in market.
- They are NOT going after mass market or volume. They are trying to increase profitability. At the same time, they are solving supply chain issues.. 5c will use different back covers and hopefully, it will cost less to manufacture..
- They are going after new segment - kids of affluent parents and young crowd with iPhone5c. Instead of iPod touch, these kids will get iPhone5c. Normally, in US these kids often used to get hands down iPhone from parents. Now, these kids will demand iPhone5c as it is more likely not to break with robust use..
- They have in-fact created teaser price for Adults as well. All agree that there is no quantum difference between 5s and 5. To avoid iPhone5 cannibalizing their 5s market, they shut down new iPhone5s and created relatively speaking inferior 5c for same price they would have offered iPhone5.
- Regarding low cost alternative, Apple is simply going to rely on their exchange program. They will get lot of exchanged phones, probably change their battery and push it to emerging cost conscious market. I am guessing that duties on these returned/re-furbished phones will also be substantially lower helping them keep costs and prices low in those markets.
In my view, it is brilliant pricing strategy and it will continue Apple as true leader in smartphone space.. They may not be leader by volume but I am sure they will continue their lead by other metrics such as actual usage and apps/music/videos etc..
Nevertheless, people are enjoying their new iPhones.. I am guessing this next quarter is going to be stellar quarter for Apple with significant jump in their profitability leading to significant jump in their share prices!!
PALO ALTO’S APPLE STORE
Shortage of iPhones mutes buying frenzy
CEOCook greets legions of Bay Area Apple fans; devices quickly run out
By Heather Somerville
hsomerville@bayareanewsgroup.com
PALO ALTO — For the first time ever, Apple released two iPhones simultaneously, but fans did not get double the choice, as a widespread shortage kept supplies low in stores.
The dual iPhone release finished out a tumultuous couple of weeks for the tech giant, which took a hit on the stock market, rebuffed backlash over the pricing of its low-cost iPhone option and discovered a security glitch in its new operating system. The pressure was on for Apple to post big sales of the new iPhone 5C and iPhone 5S, and assure consumers and investors that the Cupertino company still had something revolutionary up its sleeve.
Apple fans turned out in droves to stores across the Bay Area, many camping in line for days in hopes of getting one of the coveted iPhone 5S, the company’s new flagship device loaded with Apple’s latest and greatest. On Palo Alto’s University Avenue, fans got another surprise when the store opened Friday morning — an upbeat Apple CEO Tim Cook, who shook hands, posed for pictures and joined the crowd for a few celebratory cheers.
Cook then paid a visit to the store at Stanford Shopping Center and later sent his first tweet: “Seeing so many happy customers reminds us of why we do what we do.”
Shortage of iPhones mutes buying frenzy
CEOCook greets legions of Bay Area Apple fans; devices quickly run out
By Heather Somerville
hsomerville@bayareanewsgroup.com
PALO ALTO — For the first time ever, Apple released two iPhones simultaneously, but fans did not get double the choice, as a widespread shortage kept supplies low in stores.
The dual iPhone release finished out a tumultuous couple of weeks for the tech giant, which took a hit on the stock market, rebuffed backlash over the pricing of its low-cost iPhone option and discovered a security glitch in its new operating system. The pressure was on for Apple to post big sales of the new iPhone 5C and iPhone 5S, and assure consumers and investors that the Cupertino company still had something revolutionary up its sleeve.
Apple fans turned out in droves to stores across the Bay Area, many camping in line for days in hopes of getting one of the coveted iPhone 5S, the company’s new flagship device loaded with Apple’s latest and greatest. On Palo Alto’s University Avenue, fans got another surprise when the store opened Friday morning — an upbeat Apple CEO Tim Cook, who shook hands, posed for pictures and joined the crowd for a few celebratory cheers.
Cook then paid a visit to the store at Stanford Shopping Center and later sent his first tweet: “Seeing so many happy customers reminds us of why we do what we do.”
JANE TYSKA/STAFF PHOTOS
CEO Tim Cook celebrates the release of the new iPhones as he leaves the Apple Store on University Avenue in Palo Alto.
Dorothy Arndt, left, and veteran Bob Younger, of San Jose, showed up in Palo Alto along with a group from Gift A Vet, an organization supporting veterans in need. Arndt left the store with an iPhone 5S to give to a 53-year-old disabled Santa Clara County veteran.
==========================================================================
Spectrum of colors
First in line to meet Cook and get the new iPhone was a group from San Jose-based Gift A Vet, an organization dedicated to supporting veterans in need. Dorothy Arndt said she had been camped out since Monday, trading 12hour shifts with vets and colleagues. She left the store with a 16GB iPhone 5S in “space gray” to give to a 53-year-old disabled Santa Clara County veteran struggling to make ends meet on public assistance.
The iPhone 5S rolled out in metallic colors and with super-speedy processing power and upgraded camera features, and the lower-cost, heavier iPhone 5C is offered in a spectrum of candy-coated colors. Along with the U.S., Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and the U.K. launched the iPhone 5S and 5C on Friday. But Apple released only a limited number of the coveted iPhone 5S for the worldwide launch and only a handful of those in gold — the color that most fans were lusting after. “Everyone wanted gold,” said Benjamin Smith of Sunnyvale, who settled for gray at the University Avenue store. The iPhone 5C was more plentiful, but few fans were willing to pull out their credit cards for what some have called a repackaged version of the older iPhone 5, dressed in colorful plastic. It starts at $99.
Megan Davidson, 21, arrived at the Sprint store in Palo Alto at 3:45 a.m., where she avoided the crowd at the Apple store and was first in line for the 5S. “I think the 5C is more geared toward kids and cheaper,” she said. “I want the legit Apple phone.”
Gold is first to go
Shortages of the iPhone 5S were apparent in stores across the Peninsula, with websites showing shipments delayed until October. The location at Stanford Shopping Center ran out of unlocked units — phones sold without the software code that limits them to work only on one wireless carrier — before 9:30 a.m. An employee said the gold phones were first to go and the store had “a very limited number.” The Best Buy on Almaden Expressway in San Jose had 28 units of the 5S and sold out before 11:30 a.m., said store manager Mark Fragoza. The store had more than twice as many phones when the iPhone 5 launched last year. The picture wasn’t much better on the other side of the pond. Carriers in the U.K. told the BBC there was a severe shortage of the iPhone 5S, and customers in Asia and Australia were told they’ll have to wait until October.
“Demand for the new iPhones has been incredible and we are currently sold out or have limited supply of certain iPhone 5S models in some stores,” Apple spokesman Bill Evans said Friday.
Opening sales crucial
Opening-weekend sales are crucial for Apple after about a year without releasing a new device while rivals have begun to chip away at Apple’s dominance in the smartphone market. Piper Jaffray analyst Gene Munster said in a note to investors he expected Apple would sell 5 million to 6 million iPhones, including pre-sale orders that started Sept. 13. BTIG analyst Walter Piecyk wrote that he was encouraged because “lines were the strongest we have seen at both Apple and carrier stores” but wouldn’t know until Monday if unit sales would meet his expectations of 6 million during launch weekend. Apple has reportedly asked its suppliers to increase production of the gold-colored iPhone 5S by an additional one-third after seeing strong demand, people familiar with the situation told The Wall Street Journal on Thursday. What remains unclear is whether there are still manufacturing constraints that may keep supplies low. Apple did not respond to questions Friday about production.
Contact Heather Somerville at 510-208-6413. Follow her at Twitter.com/heathersomervil.
===================================================
JANE TYSKA/STAFF
Hoa Tran, of San Jose, leaves with a new iPhone at the Apple Store on University Avenue in Palo Alto on Friday. Customers were lined up around the block.
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