Well, the rumor was true: Apple really has taken what was seemingly a less popular phone than expected, and made it worse. Even more surprisingly, the company confirmed to Fortune that the 8GB version of the iPhone 5C will be sold in only five markets: U.K., France, Germany, Australia and China.

I could understand Apple keeping the 8GB iPhone 4S in the line-up for those who want a new iPhone but are really strapped for cash. With apps the size they are today, an 8GB phone is going to be a pretty horrible experience: by the time you’ve loaded up a few apps and taken a few photos, you can forget about using it as an iPod, and don’t expect to use it as a camcorder either. But from Apple’s perspective, it gives some people who otherwise couldn’t afford an iPhone a first step into the Apple ecosystem, and hopefully they’ll upgrade a little further down the line.

But a 8GB version of the iPhone 5c, and one only sold in five markets? That got me scratching my head … 

Let’s take the UK as an example. When discussing pricing, I’m going to compare full retail prices, as that makes sense in the UK. If you care why, the italicised section below will explain. If you don’t, you can skip it. For convenience, I’m going to convert all prices to U.S. dollars based on the exchange rate at the time of writing.

To understand why I’m comparing full retail prices, there are a couple of differences between the UK and U.S. that I should explain.

First, the USA is a what the carriers call a subsidized market (the term is misleading, but it’s the one they use). When you buy an iPhone, you may not even know what the full retail price is, because no-one ever pays it. You just pay a relatively small up-front cost, and the balance is absorbed into the cost of the airtime tariff (or, with more recent un-carrier style contracts, paid off in monthly instalments).

The UK is different. You can buy an iPhone in that way if you wish, and many do, but it’s usually a better deal to buy the phone outright for full retail. The reason? You can then get much cheaper airtime tariffs. The total outlay over the two years of a typical contact will usually be significantly less than going the subsidized route. If you can afford the up-front price of the phone, it’s a no-brainer.

Second, all UK networks are are compatible. The iPhone that works on Vodafone will also work on O2, EE or Three. So if you start out with Vodafone and then three months later O2 offers a better tariff, owning your phone outright allows you to switch carrier on one month’s notice, taking your existing phone number with you, without penalty.

So, with that understood, let’s get to it …

The 16GB iPhone 5c in the UK costs $780. All the evidence suggests that a lot of the people Apple expected to buy that instead opted to spend $133 more to get the iPhone 5s. Which makes perfect sense to me: that relatively modest bump in price gets you a lot more phone for your money.


But, sure, that will still be too high for some, so there’s the iPhone 4S still available – only the 8GB model – at $580. That’s $200 less, so you can understand that the more budget-minded would opt for that.

So, this new 8GB iPhone 5c. That costs $713. That’s just $67 less than the 16GB model, but still $133 more than the 4S. So I asked myself a couple of questions …

First, who would buy this new model? If you’re hard-pressed for cash, and want to buy a brand new iPhone at the lowest possible cost, you’re still going to buy the 4S. If you can afford to spend $133 more on a 5c, wouldn’t you then save just that tiny bit longer for the additional $67 it will cost you to get a usable 16GB model?

Ok, so maybe someone new to iPhones doesn’t know that 8GB will be nearly unusable. Maybe they buy it in blissful ignorance, and only discover the reality a month or two down the line, once they’ve started adding music and shooting video. But Apple knows this is going to happen. So that was my second question.

Why would Apple want someone’s first experience of a new model to be so frustrating? With the 4S, at least it can turn around and say, hey, it’s an out-dated model, you knew that when you bought it. With the 5c, the customer is going to rightly wonder why their brand new model, out this week, is not fit for purpose.


But Apple isn’t stupid, so if it makes what appears to be a dumb move, there has to be some method in the apparent madness. We now know part of it. An Apple spokesperson told Re/code that it’s about offering an affordable LTE model in markets where LTE is just taking off (the 4S is 3G-only).

“The mid-tier iPhone segment is growing year-over-year and the 8GB model provides a more affordable option for markets where LTE is becoming more established,” an Apple representative told Re/code. The iPhone 5c, unlike the iPhone 4s, which is also still sold, supports LTE networks.

The carriers in particular want to get everyone onto LTE as that enables them to sell more data.

But that doesn’t explain an 8GB model: the difference in manufacturing cost to Apple between an 8GB and 16G model is a couple of bucks. So here’s the only explanation I’ve been able to come up with, based on Apple knowing a lot more about its customer segments than any of us do …

Perhaps there is a segment of the market that just wants a new model iPhone, but won’t do very much with it. Maybe a new-model iPhone is a status symbol to them. Maybe they like the ease of use of iOS. But either way, they have very modest needs: they stick with the on-board apps, load up a few music albums, take a modest number of photos. Maybe for them, 8GB is enough.

If so, it’s a brilliant move by Apple. No other segments are going to downsize their purchase plans to 8GB because they know that, for most of us, it would be unworkable. But a market segment that doesn’t need more than 8GB because it does so little with the phone will see the shiny new model, compare it with the now-elderly 4S and decide the difference in price is worth it to have the something immediately recognisable as a current model.

In that scenario, Apple makes more money than it would have done from the 4S, and hastens the day that it can lose the last of the 30-pin devices into the bargain. Smart, not dumb.

Is my theory right? Or do you have a better one? As ever, let us know in the comments.

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103 Responses to “Why did Apple launch an 8GB version of the iPhone 5c (really)?”

  1. karlesk says:

    Bang on.

  2. panchoávila says:

    Im from Chile, and the stock of iPhone 5S is so low, that iPhone 5C is in almost every pocket of the city.

  3. simple…

    Some of the top marketing people at Apple have started making dumb decisions… and these have now reached the customers.

    I hope Tim realises this quick enough :/

  4. Allen Buck says:

    There are many people that will take years to figure out how to use the camera. That’s enough time for people to learn the device and upgrade in a few years if they chose so.

  5. Dafty Punk says:

    Hate to admit it, but my mom would’ve bought this. She has the 16GB 5c, but carries no music, rarely takes pics (Uploads what few photo’s she does take into iPhoto often), and only plays some simple games like candy crush. She likes the colors and the screen size of the 5c over the 4s, but doesn’t need the bells and whistles.

  6. Also keep in mind two other things…

    1. It’s very possible that iOS 8 will require an A6 chip or essentially, a Lightning connection. Rather than re-working the physical construction of the product (think iPad 3 to iPad 4), they just made a [slightly] cheaper version of their baseline “current model” phone.

    2. I would imagine that sooner than later, Apple is also going to cease production of iPhone 4s. As of right now, Apple has three production lines open; iPhone 5s, iPhone 5c, iPhone 4s. That’s three sets of fixed expenses. By coming out with a successor to the iPhone 4s, they can now shut down one of their three production lines and save a lot of money. They put the new 8gb 5c on the same production line as the 16 and 32gb.

    I think it’s a combination of all three personally. A lot of people, especially those that post on forums like this are obsessed with the fact that all users use a ton of everything; ton of data, ton of apps, ton of pictures, ton of music and blah blah blah. The reality is, they don’t. The users who spend Monday and Tuesday morning’s posting on tech forums do but isn’t that, umm, obvious? There are literally MILLIONS of users over in the eastern hemisphere who don’t need that much but they want a smart phone simply because of the built-in features they offer.

    The funny thing is, think about your iPhone and what’s on it. Now, think about what you can do on an iPhone without having media on it. You can do practically everything! No, you can’t have the entire discography of The Beatles on an 8gb phone. No, you can’t go on Safari in Africa and take pictures of every live animal/plant/human you see. No, you can’t put the entire trilogy of Lord of the Rings in HD on your 8gb phone. But you can have loads of other things! That coupled with the thought of having the internet in your pocket, for users who might not even have internet access at home, is a huge leap forward.

  7. Both my mum and mother-in-law have iPad minis, the 16gb versions, and they have prob only added an extra 1gb of data after the OS. My mum misses her (my) old 3GS (8GB) which finally died and she never filled that up. I guess it’s for that market.

  8. nonyabiness says:

    I think that regardless of their reasoning, it still harms their image and poses a great risk of providing a poor user experience. While your theory sounds valid, it’s still a difficult sell. The cost for Apple between the 8 and 16GB NAND chips is negligible. They should’ve reduced the cost of the whole line, with the 16GB model at the new 8GB price, and maintaining their $100 price (or possible reducing to $75) increase per doubling of space. It would’ve looked progressive and pragmatic. Instead, Apple risks looking even further outdated, and I hate to say it, greedy.

  9. Brian Victor says:

    If the cost of manufacturing between 8 GB and 16 GB really is only a few dollars (even, say $10), I still question the wisdom of giving so little room. It does, as you said, become a frustrating experience if the new user starts trying to do more with their phone. Granted, it is their own fault for not thinking their purchase through, but then again, it is also inconsiderate of Apple. Do they want to please their customer base or not?

  10. Andi Lindner says:

    There are so many interesting questions about an iPhone 5c. Lets start with the colors:

    Why isn´t there a black one? Apple knows really well, most of the customers would choose that color instead of a overpriced 8gb model. A product red would also be perfect fit in plastic.
    Why do they sell the 5c for a high price in their stores but you can buy a new 16gb model for 200 bucks off on ebay, sometimes amazon. As i customer i would say HEY GREAT this is really cheap and consider to buy one over there.
    What will apple do to make it a cult product? The 5c, in my view, has the potential of a mass-cult product like a pair of chucks. Everyone have at least one at the floor.
    What will happen to the 5c when the next generation comes up? Will we then get a really affordable 5c last gen?
    What do you think about the new ad campaign isee5c and the massively posted ads everywhere? I only can talk about munich. You can’t go 200meters in the city without see at least one poster.

    Greets Andy

    • Andi Lindner says:

      one more… well you know… Is the strategy a way to get samsung customers? It´s the first time you can get an iPhone for the same price as Samsung latest 8gb Galaxy mini. Will it also drive the sales?

      More and more of my german nontechi friends are thinking about an 5c. Two of them already bought one and i really can tell that they never wanted any iPhone before.

    • Wanna show me where you can buy a brand new 5c for 200 bucks? Because I sure would love to get one. I’ve looked on ebay plenty of times and never seen a new or used 5c sell for $200.

  11. It could be a good way to get people into buying more into their yearly iCloud storage too. A cheap(er) iPhone to get them hooked into the iOS ecosystem then essentially force them into buying increased iCloud storage or next time buy the next higher capacity iPhone now that they’ve invested into the iOS ecosystem

  12. jakexb says:

    There is definitely a type of person who only use a handful of apps. Facebook, Email, Spotify, Snapchat, a few games… that sort of thing. For that type of user, this would be a great phone.

  13. I would understand the move of Apple if they dropped out the 4S and offered the 5C at the same pricing with 8 GB.

    But for me the 5C is currently the same rank as the Apple Newton and the Apple Pippin.

    Apple is saying they don’t care about money so why are they doing something like this to the costumer.

    I think there won’t (hopefully) be a iPhone 6C. :-)

  14. Explanation could be that smart marketing people at apple had some spare time and started considering the psychology of people. Even a choice that no one takes can have a influence on your decision as you compare to it. The economist did this a while back with their subscriptions models
    1. Print Only 100$
    2. Print and Internet 100$
    3. Internet only 60$
    suddenly Print and Internet looks a lot better then even if no one ever choose Print only. Just having the option makes a difference. So Apple might want to make the 16GB model more appealing as it is better than the 8gb model.

  15. I think that if they want to get LTE into emerging markets, then this is a brilliant move. Especially for those who would be hard pressed to buy the 16GB 5c or 5s.

    • desksaver says:

      Except that none of those five countries can remotely be considered as ‘emerging markets’. Compared to any of those countries, the number of LTE subscribers in US is like a drop in a bucket.

      • Ben Lovejoy says:

        That’s not quite the case: the UK got 3G early and LTE late. Only one of the UK carriers had LTE last year, and the others are still at a very early stage in their roll-outs.

  16. I am a very tech-oriented person and I live easily within a 16 gb limit. If I sacrifice a couple of apps, and more religiously delete photos and videos I could live within 8, but it would be annoying. Having said that, this is the phone I would give to my kids or my parents.

  17. I think this is very logical step and I approve it. This will mean they won’t sell 4S anymore soon.

  18. I think it is an interesting analysis. only one thing to clarify about UK phones market:
    It is true that here we can buy phones without contracts, and that is the only option you have to switch between carriers easily as you described.
    Most people however opt for 12, 18 (with higher upfront and monthly cost) or 24 months binding contracts that cannot be ended without paying the full amount of the remaining months subscription, this also locks the phone in the specific carrier for at least a few months, after that it costs £15-£50 ($25-$80) to unlock the phone.
    I do agree totally with your idea that a lot o iPhone users do not use their phones the way we (as the audience of websites like 9to5) does, so their requirements for a satisfactory (i’d risk it and say eve excellent) experience will be dramatically lower.
    That doesn’t make Apple look like the bad company that wants its user base unsatisfied to drive them towards CloudStorage paid upgrades. Possibly move them to the higher tier (and more profitable) of their phones offer.

  19. rahhbriley says:

    I think its purpose is partially as you state here Ben. I’d agree with the comments about getting more people on Lighting, getting LTE phones in more markets, and then making more phones compatible with future OSs. I think also, they’re setting up a replacement for the 4S for once they are ready to pull the plug on them.

    One other factor in regards to pricing; Ben you mention that many people considering the 16gb 5c,often elect to spend the extra $133 to get the 5s because of the “more phone for your money” factor. Well let’s take that same exact purchasing decision and factor in the option for the 8gb 5c. The difference of only $133 for the 16gb 5c and 5s may not be too big of deal…but if they see the 8gb 5c at $713 and 16gb 5s at $913, the $200 diff may be a decent enough savings to opt for the 8gb 5c?

    • Ben Lovejoy says:

      Absolutely, and since enough people seem to be looking at the 5c and 5s and opting for the 5s without any encouragement from Apple, there will probably be more people upgrading their planned purchase from the 4S to the 5c than those downgrading from 5s to 5c.

  20. All of people assume the iPhone 5c is a bad horse based on comments by Apple (via Tim Cook). We expected the iPhone 5c to be the low cost solution to Android dominance but it wasn’t. Maybe Apple was expecting more volume out of this phone but it doesn’t mean that is doesn’t sell at all. I’m seeing more and more 5c around me and personnally, I really like the feel of this phone while in my hand. The only problems with this phone: wrong choice of colours and the Apple casing. Otherwise, this is a really great device. An 8 gb phone is still making sense for people who wants to get on iOS ecosystem without doing much out of it…

    • rahhbriley says:

      Agreed, although the color casing opinion is more subjective to the individual. I don’t like all the colors, but 2 or 3 are strong in my opinion. And I think those comments from Tim were also taken out of context a bit.

    • Ben Lovejoy says:

      Certainly Apple never intended to create the ‘C for Cheap’ iPhone that had been widely predicted, and the 5c is still a success in absolute terms – it has only disappointed in relative sales.

  21. axsanford says:

    I wouldn’t underplay the selling power of the iPhone as a status symbol, and what can be done with 8GB. My dad just bought a 8GB 4S, and honestly it has changed him totally. It works for him great: he takes advantage of all the native apps, and has a few content apps, but other than that, he doesn’t ‘understand’ the App Store. So GB to app allocation is low. He doesn’t use the music app cause he’s got a thousand CDs and he like I listen to music that way. No GB there, either. That basically leaves him with the photos. The iPhone is his camera. So my point is, the 8GB is his gateway device, and it is enough. Plus he thinks he looks pretty cool with an iPhone. It a great product to get started with and he’ll upgrade later on, just as Apple wants him too. He’ll realize then that he’ll need a 16 or 32GB model too. I don’t see a problem with the 8GB.

  22. If your theory is right, and I’m understanding it correctly, you’re saying that this is a “smart move” because Apple makes a lot more money selling the 5c than the 4s (or 16GB 5c, which would only cost them “a couple of bucks more.”) If this is correct, then it means Apple has started making profit its motive, and that, in my book, would signify the beginning of its decline…

    • Ben Lovejoy says:

      Profit has always been a motive for Apple: that’s why it only makes high-end products, why it charges large premiums for differences in flash storage that cost a fraction of the retail difference and why Steve Jobs stayed out of the television market for so long (people didn’t upgrade television sets often enough, and margins were too low). That’s not the same as profit being more important than other motives.

      • rahhbriley says:

        Good answer. They have to care about profit, and the shy away from low profit markets, because it wouldn’t be a good use of their time, to enable them to keep doing great things. That doesn’t mean they value it over other things. But it would be stupid not to care about them. High margins and profits enable them to make swift, large, and sometimes competition changing moves. I.e. pre-purchasing materials at lower rates (sometimes to even keep competitors slower at reaching market), financing suppliers to achieve higher potential (GTAT), going solar, buying AuthenTec. etc. Because of the financial position, they are better enabled to make greater products yet. Money is their enabler, not their motive.

  23. philips9179 says:

    so let me get this straight, some ‘didn’t know better’ mum, or worse ‘a first timer’ to the apple ecosystem finds out the phone they just bought for £407, let me just repeat that, £407, won’t hold s**t, what do think thats gonna do for apples brand, when those people find out how much it can hold and think i just paid £407 for this piece of …, do the people who run apple actually live in the real world or what, why do i keep on thinking about chocolate kettles

    • Ben Lovejoy says:

      Well, this is the big question. My first thought was exactly that. But if I’m right about the market segment (and in the comments here we’ve heard several examples of mums and dads who appear to match my theory), they won’t be disappointed.

      • philips9179 says:

        Oh c’mon Ben. You don’t really believe that do you, and I’m not taking the pee here either! Do you seriously think mums and dads who are the most price conscious decision makers on this earth are gonna shell out more money for a phone when for example on principle they might just go for android phone instead???

      • Ben Lovejoy says:

        Rather a lot of iPhone owners are parents …

      • philips9179 says:

        Yes, so you think that specifically that market segment are gonna pay out more money after the damage has already been done, and not buy a android phone out of principle…???

      • Ben Lovejoy says:

        See above – if 8GB satisfies their needs, then it’s a win-win. If not …

      • philips9179 says:

        Yes, but Ben, this is exactly my point how exactly are they gonna know what their needs are before they buy the phone and then they go and spend 407 quid on it, what exactly are they going to feel when they find out how much they can store on it, see an android phone, see how much cheaper, and how much they can store on it, what exactly will happen to the phone then and apples rep

      • Ben Lovejoy says:

        Well, as I say, this is the question. By definition, buyers of an 8GB phone are non-technical. That will either mean they don’t use much storage, and are happy, or they will try to shoot video and load it up with music and have a bad experience. Only time will tell which applies.

      • This has already begun. After the iPhone 3G debacle, I saw a lot of iPhone users go to Android, mostly Galaxy SIII. Maybe 25% came back. Maybe. All who did complain that Apple isn’t innovating. Some have even moved on to Notes.
        But the 8GB iPhone 4 iOS7 (and now iOS 7.1) update was disastrous. Because iOS used up so much flash storage anyhow, and the updates are so big, people can’t update their iPhones. Many of them either don’t have computers, or had never hooked their iPhone up TO a computer before. The UX of hooking a 8-month-old iPhone to iTunes for the first time for an iOS update is NOT pretty. Of the 8GB iPhone customers I knew, nearly all have subsequently jumped ship from iPhone, with most vowing never to come back (some even having paid ETFs to go). Many were women, and they almost all went to Notes (something about women and bigger screens…Apple is missing that THEY CARRY FRIGGING PURSES). Every single woman I know that moved to a Note has expressed how much better they like it than their iPhone (nearly a half dozen). A small number are waiting to upgrade to the next new iPhone 6; of those, a bigger screen is what most want.

        When those kinds of folks went to Android, many didn’t have great experiences. More than half came back to iPhone, and went with higher capacity devices (having learned the “nothing is free lesson”). The latest round of jumpers are NOT having the problems with the latest Android 4.3/4.4 devices, they really like them and see them as equitable to iPhone. They aren’t coming back, not any time soon. They won’t pay a premium for what they consider to be an inferior, more rigidly-restricted ecosystem. Sure, that isn’t the WAY they say it to me, but they just don’t have any “loyalty” to iPhone. Price and choice are more common preferences, both things that Apple has absolutely dropped the ball on.

        I’ve seen this before, a time when the alternative was “good enough” to hurt Apple: Win98. Win95 was close, Android 4.1, but it was Windows 98 that was the death knell. Win98 sucked even compared to Classic Mac OS, but it didn’t matter. It was cheaper, provided more choice, and was “good enough”. The history is being written. And this 8GB iPhone 5c will be looked back at as a HUGE blunder.

      • philips9179 says:

        And how long do you think it’ll take for them to fill up 8gb. It’s nothing to do with choice, the feeling is much worse than that…

  24. There is one more reason someone might spend one-hundred thirty three more on the 5c. Cloud storage. 8GB is just fine if all you are loading is apps and taking photos. Why? You listen to your music via something like Spotify, which puts all the music in the cloud. Photos? Those go to the cloud too, and you then delete them off your phone.

    • philips9179 says:

      Who does that? Have you ever tried that? And since when has the internet become ubquitious and cheap??? Don’t forget the 407 quid you just paid when your paying through the nose each month for your data charges, etc

  25. This is seriously like buying a car with only 3 wheels. 5 feet down the road you’re going to wish that you paid the extra money for that 4th wheel.

    Or I guess you could just pay for iCloud storage over and over… and over.

    Maybe this should be exclusively called the iCloudPhone

  26. rzozaya1969 says:

    I guess it’s just another segmentation, I think that you make a point in not all users will download bunch of stuff and fill the device with photos or music.

    Still… that makes the 4s more attractive for people that only want to use the phone for calls, whatsapp and just a pic now and then. I’m thinking that this kind of users (not too much tech dependant) won’t care much about LTE.

    I’m not sure it’s a good move or not, I don’t think it’s a very smart move, but will attract some buyers that just want the ‘newest’ model without minding that the newest does not necesarrily mean most advanced model.

  27. Got a 5C 32 (in Kermit the Frog green) a couple months back. Love it. No discernable reason to go 5S that I can think of ….

  28. The 8gb iPhone 5c which now stands for “cloud” only storage.

    What’s left after the iOS is installed.. 4.5gb? And yes Apple will probably make millions on this model or a “cloud” only model

  29. Perhaps iOS 8 will expand iCloud functionality to store/use Apps? Negating the need for extra storage for applications altogether.

    • I don’t think apps will run on icloud anytime soon. Maybe in the future, when an icloud file system will be available with a decent speed. But what if you don’t have a good connection? No apps?
      Of course you can have all your music/pics/videos on the cloud and that’s why I bought the 16GB model.

  30. standardpull says:

    Here’s why there is a “5C”, and why it has low specs:

    1. It is as capable as an iPhone 5
    2. It is for the grandmas that don’t install many apps at all – 8 GB isn’t a limiter.
    3. It is no more costly to make as an iPhone 4S
    4. It is as inexpensive as an iPhone 4S now
    5. It has a usable service life longer than an iPhone 4S

    In short: Don’t want to pay for a 5S? Not really a smartphone gamer? Get a 5C with 8 GB

    What would Apple rather you buy? A 5S, as it is more profitable. But buying a 5C is no more expensive than any other low-end smartphone on the market from the consumers vantage point.

  31. Maybe that’s the thinking, but…in 3 years all phones (and electronic appliances, including tablets) sold in the EU will HAVE to use a standardised micro-USB! What will Apple do? I doubt they will agree to produce 2 versions of the iPhone and the iPad, i doubt even more they’ll decide not to seek anymore to UK, Germany, France, Italy etc. (28 countries for now). This will be very interesting

  32. PMZanetti says:

    If what’s most important to you is spending $0 on contract for the phone at purchase, than an 8GB 5c is more than enough for you.

    Its better offering than yesterday’s 4S. How this is SO HARD for certain people to understand is mind-boggling.

  33. Boyan Kolev says:

    Let me say something.
    4s is $130 cheaper.
    Apple likes to charge you $130 for LTE.
    So for $130 more you get bigger screen, LTE, perhaps better camera and … something… :D

    So, maybe, they are filling segments. Or i’m high.

  34. In my opinion, a lot of people don’t actually need anything larger than 8GB, more storage on the device just enables them to be lazy with how they manage the stuff on it. In my experience one of the main reasons people think they need a phone with bigger storage is because they store thousands of photos on the thing. I had a friend who was carrying around 6GB of pictures on her iPhone, oblivious to the fact that if she lost that handset then she was also going to lose most of those photos too (photos of the entire first year of her baby’s life). There are also other things that people don’t always think of like messages that include loads of photos that are going to take up a lot of memory – she had almost 2GB on hers. Then there’s the apps that everybody has installed on their devices but never uses or music that they never listen to. If people were more savvy when it comes to what they store on their device and how they manage their data then a lot of people would be able to cope just fine with 8GB.

  35. stalkale says:

    If you’re into cloud storage, 8Gb is all you need. iCloud for photos, Dropbox for files, spotlify or iTunes Radio for music. All you really need the storage for is apps. So an 8Gb model might work for some.

  36. This analysis only focuses on the UK market, although the 8Gb 5C is available in 5 European markets.
    Unlike what you might think, this iPhone is clearly dedicated to be sold as a subsidised device or to push people to buy the 16Gb version instead.
    I see two cases:
    1.) Nobody will ever buy a 50€ cheaper phone with half the storage… unless it costs 1€.
    For instance, most of the French carriers started to sell the device for a price oscillating from 1 to 30€ with a 2 year subscription which costs monthly 45€.
    2.) Since the first model costs 1€, you start contemplating the fact of buying an iPhone. And then you realise that for 50€ more you get the double of storage.
    And this is on.

    • Ben Lovejoy says:

      I focused on outright purchase to avoid the piece getting too involved, but the same principle applies to contract, with similar relative differences in monthly tariffs.

  37. yep, my wife owns her 5c and loves it. she is a mom…just not my mom. She has like 10 songs on there and uses youtube and iTunes radio for rest. She gave up using her MBP and only uses her phone. She wont even pick up our unused iPad.

  38. Anoop Menon says:

    Why don’t they release a version of this with an external microsd card slot so that the people can afford to upgrade by adding more memory when they get accustomed to iOS environment? Oops sorry I am talking about Apple here, forgot :)

  39. “Perhaps there is a segment of the market that just wants a new model iPhone, but won’t do very much with it. Maybe a new-model iPhone is a status symbol to them. Maybe they like the ease of use of iOS. But either way, they have very modest needs: they stick with the on-board apps, load up a few music albums, take a modest number of photos. Maybe for them, 8GB is enough.”

    This is it. My parents and others don’t need 10’s of apps, or have many songs, if any at all. They just want/need a modern phone. The 4s is a bit dated, heavy, and 3G. So this makes perfect sense.

    • Ben Lovejoy says:

      It seems the parents of 9to5Mac types provide the confirmation :-)

      • philips9179 says:

        It’s going to be interesting when they start to realise how quickly they use up 8gb when their kids (because kids do) start sticking some tracks, some photos, a movie, some apps on it!!! It represents poor value, and the danger of people feeling they have been ripped off. and as soon as that starts gaining publicity, how are apple going to look? If I was android I would start marketing the hell out of this

  40. While there are cases when 8G 5C does make sense, you forgot two things; when phones are unlocked and they are compatible with all the carriers, there’s a healthy market for used phones. One can easily get a year or two old phone for less money if one wants to save shillings.

    The other is 3G networks are faster than the US, one doesn’t need 4G for decent speeds with the HSPA+’s out there. I just spent months in Australia with 3G as the subscription had unlimited data, compared to the 4G subscription with 500MB/day data cap. I know 4G would have been faster but 3G was just fine, most of the time well above 20 Mbit/s.

    I’m afraid Apple has grown so big that the marketing/sales people who made the 8G 5C a reality don’t know had bad an 8G iOS device is today. Back in the 90’s Nokia spoiled many good phones when they hit the beancounter desk and they saved in the wrong place.

  41. 8gb is not unusable by any means, just power users who would perhaps be the type of people who blog about phones or visit blogs about phones might see it that way. with music streaming and photo syncing, you really don’t need to keep much data on the phone

  42. That being said, this is for contracts. This will be positioned as the ‘free’ model when the 4s reaches end of life, which might come sooner than the iPhone 6. Remember how the iPod touch 4 hung around for a while?

  43. I don’t think making a 8GB iPhone 5C is useful for anyone. I mean, who would buy it? You don’t have to be a tech enthusiast to know that you will always run out of capacity with 8GB. The iPhone 5C has been tagged as “the cheap phone” even before its release, when it was not intended to be so, heck, even Jony Ive said it wasn’t. It was supposed to be that “customizable” part of iPhone (the middle-end, sorta). With the release of the 8GB, they just probably contradicted themselves, because they are actually trying to make it “cheap”.

  44. I still think it’s dumb because I don’t believe the part savings are of any concern huge. So why cripple the 5C even more? The best thing to me would always be to just lower the price of the 16GB and be done with it. One of the main anti-iPhone arguments I always hear is about the non-existing SD Card slot. Of course those are people who know what SD Cards are.

    So weighing out the choices between just lowering the price of the 16GB iPhone 5C vs a cheaper 8GB iPhone 5C there’s one thing I consider: “lowering the price mid-cycle”

    If Apple would lower the price of the 16GB now, shortly after it’s release, it might anger those who purchased the 5C just recently. It would also suggest that they could have done it cheaper from the start and have only been charging a premium on the phone to begin with.
    So making it seem that the actual parts in the phone are that relevant to the price, it offers a cheaper iPhone for those people you described without making Apple “the bad guy”.

    My guess would be that we will begin seeing price drops, with larger prices differences between the two product lines, as soon as they come out with the iPhone 6 (if they hold on to the two product lines) that way it will look as if it’s mainly due to the availability of cheaper parts / moore’s law.

    just my 2 cents.

  45. And, in UK at least, it would sell but for the crazy high pricing – get it a lot nearer $500 unlocked – but at the current price so close to that of the 16G model I don’t see such a crippled phone selling well.

    Perhaps Apple does not understand the UK market where several competing, and technically compatible, carriers are driving data costs down.

  46. I also think it’s all about the iCloud, that’s why it’s called the 5c. The stands for cloud, not color or cheap. You get the full ecosystem and capabilities of a good iOS device and you’re supposed to store your stuff in the cloud.

  47. I don’t think it was a good move. As you pointed out 8GB cost 2/3$, so they’re not saving much money with this model. And yes, for “moms” 8GB are more than enough, but the point is that in 2014 is quite ridiculous to sell a phone without memory card with only 8GB of storage at that price. iPhone 5C is not a Nokia 520 entry level, is a very expensive phone! Why didn’t they just cut the 16 and 32GB prices instead?
    As their policy is to keep the same price in Apple Store until a new iphone comes out they could have sold 5C at low prices to mobile operators and retail (bestbuy etc.) in order to increase market share without this 8GB option.
    Buying a 5C is a good idea as long as it cost at least 200/250$ less than a 5S with the same storage. If you cannot afford a 5C with 16GB you should go for the 4S, not the 5C 8GB…

  48. I’m lucky(?) in that I work with mostly women. Each has an iPhone and most of them seem to be light users – phone, text, email, pics and a couple of apps. 8gb would probably work for the majority. At them same time, a majority opted the 5s, because it’s “the best one”. The others went with the 4s because “it was free”.

    On the other hand, my 12 y/o daughter scoffed when she heard about the 8gb 5c. She complains she spends too much time managing the memory on her 8gb iPod touch. (She has a cheap Daddy :-)

  49. gargravarr says:

    Ben, Ben, Ben. 8GB might be unusable for YOU, but my Dad has an 8GB 4S that he survives with just fine. He takes photos, has music on it and lots of apps as well. If you stop filtering everything through your own experience for just a second, then you might see why for some people, 8GB is just fine.

  50. One thing Apple managed to get with this move!
    People are writing about the 5C which otherwise would probably not…

  51. here is another option, my father is 72 year old, he doesnt listen to music or has many apps, he has an iPad and he wants to buy his first smart phone, this device will do email, skype, text and calls and 4-5 apps, as well as GPS. thats what he needs. to be honest he wont even use 8gb.

  52. reynoutvab says:

    what is the difference in costs for apple to put 16 GB chip and not 8GB. – what does 8GB cost.
    peanuts! Only the value for end user is huge so why?

  53. Mark Granger says:

    Flash storage costs 50 cents per GB. If you overpay by double that, cutting 8 GB from the iPhone 5c would save $8. The problem here is that the 5c is vastly overpriced (which is not something I feel about the 5s due to its other advanced features and design). The 5c looks like a cheap smart phone. Apple bet that customers would pay a big premium just to get iOS. The truth is that we value hardware features and design far more than the software. Apple needs a low cost smart phone. The 5c fits the bill. They should charge $350 for it unlocked (or $358 if you want 16 GB).

  54. You’re completely leaving out the Enterprise need for this phone. Where I work (Fortune 50 company in the US) we eliminated desk phones about 8 years ago and everyone got a flip phones (managers on up Blackberrys). We are now in the process of getting all our phones replaced with an iPhone 5c and they only have 8GB. The last thing we need on our phones are videos or music for work but are great for email, calendar and WebEx.

    • Ben Lovejoy says:

      Interesting, I’d have expected the Enterprise market to want PDFs, presentations, etc, but I can see that for a straight desk phone replacement, 8GB could do the job.

  55. If you think about it its clever, although yes 8gb isn’t much space especially after the operating system and formatting. But what about the people such as my dad for example who hardly use it for music and use it to play a casual game and take quick snaps. He has a 4s currently and its 8gb he still has 3gb left. I currently have the 8gb 5c and I haven’t gone over 4gb because yes I love technology but as someone else said not everyone uses an iPhone as a power user device some of us use it to browse facebook and listen to the odd song or too. I don’t agree with the price but I agree with having an 8gb model