Firstly, compare to iPhone 5S, people claim 5C just looks an iPhone 5 with a candy-colored plastic shell. According to a report published by UBS, the same memory for 16 Gigabyte iPhone, 5S costs $213 in materials, whereas a 5C costs $156IPhone 5S has metal shell, Touch ID fingerprint scanner, more advanced A7 chipset, Motion Coprocessor and True tone flash for camera. The different price due to plastic case of $42 and finger print sensor of $7. However, the price of iPhone 5C is only $100 less than iPhone 5S. The UBS also estimates the gross margins of iPhone 5S is 45-55% and for iPhone 5S is 48-54% (Ben, 2013). As a rational consumer, I will buy iPhone 5S instead of iPhone 5C, since 5S has much more functions, which is not at a so much higher price. Secondly, the factors of competitor also have huge effects. Samsung is the key part for apple to make its “retina display” screen, as well as apple use Sony’s sensor in its camera. We know that Samsung and Sony are competitors. Apple Inc. is hiring, relying and paying them. But if someday, Samsung or Sony stop providing essential parts to apple, what will happen? I think Apple Inc. has to produce all manufacturing parts by themselves under a big amount of fixed cost, which will have a big effect on Apple’s price decision. Thirdly, the price of iPhone 5C is not as low as rumored. It brings the question to us, who exactly is Apple targeting? We know that
Firstly, compare to iPhone 5S, people claim 5C just looks an iPhone 5 with a candy-colored plastic shell. According to a report published by UBS, the same memory for 16 Gigabyte iPhone, 5S costs $213 in materials, whereas a 5C costs $156IPhone 5S has metal shell, Touch ID fingerprint scanner, more advanced A7 chipset, Motion Coprocessor and True tone flash for camera. The different price due to plastic case of $42 and finger print sensor of $7. However, the price of iPhone 5C is only $100 less than iPhone 5S. The UBS also estimates the gross margins of iPhone 5S is 45-55% and for iPhone 5S is 48-54% (Ben, 2013). As a rational consumer, I will buy iPhone 5S instead of iPhone 5C, since 5S has much more functions, which is not at a so much higher price. Secondly, the factors of competitor also have huge effects. Samsung is the key part for apple to make its “retina display” screen, as well as apple use Sony’s sensor in its camera. We know that Samsung and Sony are competitors. Apple Inc. is hiring, relying and paying them. But if someday, Samsung or Sony stop providing essential parts to apple, what will happen? I think Apple Inc. has to produce all manufacturing parts by themselves under a big amount of fixed cost, which will have a big effect on Apple’s price decision. Thirdly, the price of iPhone 5C is not as low as rumored. It brings the question to us, who exactly is Apple targeting? We know that