Yesterday I posted about the two big things that were going to happen. They happened. I watched. Here are my reactions:

NYC Mayoral Race – As expected Bill de Blasio and Joe Lhota won their races. There is some question this morning whether de Blasio will need to do a runoff election with Bill Thompson or not. Either way, neither of them are what NYC needs which is to move agressively forward, not to head backwards. As Joe Lhota said in his victory speech, all you need to do is travel around to parts of the Bronx, Queens, and Brooklyn that fifteen years ago one could not walk into without taking their lives into their hands and marvel at the renaissance in these neighborhoods. We need more of that in NYC not a return to what NYC was like in the 90s. I plan to do what I can to elect a mayor who will take us in that direction. It is likely to be a waste of time and money but one must try to do what they believe is right.

The iPhone 5C – Apple introduced two new iPhones yesterday, the new top of the line 5S and a less expensive phone called the 5C. This photo shows off the new iPhone product line.

Iphone product line

Here's my problem with that photo – the prices shown are all subsidized prices. The iPhone 4s is not free, it is free with a two year contract. Who would sign a contract for two years to get a phone that is two years old? The reality of much of the world is that people don't sign two year contracts like we do here in the US. They buy pre-paid sim cards and stick them into unsubsized phones. And on that basis, the 5C is a big disappointment. It will sell for $100 less than the 5S in the unsubsized market, which means $549 for 16gb and $649 for 32gb. 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.

So it's a morning of disappointment here at AVC. I stayed up late watching the returns and got up early thinking about this stuff. I am tired, cranky, and annoyed. I will get over all of it.


Comments (Archived):

  1. Tony

    I agree with your analysis on the iPhone, it feels like the 5C cheapens the iPhone brand but as you point out on the unsubsidized market it still is not affordable to most. Bad move by Apple, I think they should have stuck with their traditional approach and only release 5S.

    1. SubstrateUndertow

      Maybe the 5C is about the youth fashion market more than price ?

  2. Dave W Baldwin

    Agree. With the carriers promoting the freedom to change phones in the middle of their contract, there will be plenty of sales for the one generation back anyway. I do have to laugh thought with the commercial (I think Verizon) showing the old iPhone and implying the ability to change to Samsung.

  3. Cam MacRae

    The 16GB 5C is priced at US$688 here unlocked.Hahahahahahahahahaha…ah…ah…hah…Apple are crazy stupid.

    1. JamesHRH

      They have 40% market share in the US and many of their products produce 40% margins.My kind of crazy brother.

      1. Cam MacRae

        Once upon a time they had that kind of market share here. I hear Tim Cook does a mean oie rΓ΄tie Γ  l’orange.

  4. LIAD

    I know iPhone models are important and all that. But they’re really not.Let’s not sweat the small stuff. Especially today.#FreeHugs

    1. ShanaC

      #extrafreehugs if you feel disappointed

      1. Matt A. Myers

        I may find and wear a Free Hugs t-shirt to the AVC meetup.

    2. JamesHRH

      I think it is great that we argue about iPhones on 9/11.And mayoralty possibilities.And honour the fallen.Freedom is about the past, the present and the future.

    3. Ela Madej

      Exactly! Don’t stress over phones @fredwilson:disqus! The universe did not even blink over the new iPhone announcement.#MoreFreeHugs

    4. JLM

      .Damn good perspective. Thank you.Well played.JLM.

    5. Matt A. Myers

      It is if you’re wanting cheap competitors to exist. Someone else will come along, no doubt..

      1. colormedisappointed

        Cheap competitors already exist, they’re called Android phones.

        1. Matt A. Myers

          Fair enough, though they don’t hold to the strict design constraints that Apple has been trying to uphold. I think these constraints are slipping now though that Steve is no longer guiding them – which will allow Android phones, competing phones, to gain market share faster.

    6. Jez

      The thing is 9/11 was an attempt to change our way of life, so perhaps talking about new gadgets is actually the correct response. Hopefully we are largely unchanged and they didn’t get what they wanted.This isn’t to say we should forget, or we ignore the suffering of people on that day and beyond, but we cannot let the men of violence win. Ultimately this must be a futile act, one that fails in its objectives. If not, such an act will be repeated. To carry on, despite the loss, this is the price of true freedom.So, how about those new iPhones eh?

  5. awaldstein

    Apple may have lost touch with who they are. So be it.New York knows exactly who they are but can’t find a leader. That’s a real tragedy.I woke up thinking about 9/11 and posted on it ( I can’t change that one but it pays to remember.

    1. Avi Deitcher

      Actually, I think they have kept too closely in touch.They are a premium brand, hungry to compete in the value market, not because they “value” it (pun intended), but because they need China and they need to keep sufficient mass for the ecosystem (read “Apps”).So they are a premium brand trying to go value which is against they very DNA. They are in *too* close touch with who they are….Hmm, good topic for a post. Writing now…

      1. awaldstein

        Agree….they’ve lost touch with themselves.Chasing the market is something that Apple has never done prior.

        1. Avi Deitcher

          Yeah. They either need to stick with their market, or they need to consciously strategically decide that there is a new market they need to play in and create the DNA to do so.Classic example is Toyota and Honda moving upmarket with Lexus and Acura, but lots of examples.

          1. awaldstein

            They are suffering under a vision gap and the severe pains of growth.I’m a big fan of them but their online support while still accessible is struggling under the breadth of products, their new OS and having enough experts who are truly that.

          2. Avi Deitcher

            Vision gap and growth pains are two separate things. Vision gap does not surprise me. Growth does. After all, Tim Cook made his name at Apple by managing growth as COO. He is supposed to be a brilliant executions person.

          3. awaldstein

            True but they are failing on two fronts in my opinion.

          4. Avi Deitcher

            Not disagreeing, just surprised.

          5. JamesHRH

            I agree, I would love to have them go even more high end and introduce concierge services (people i pay to manage my Apple products).

        2. JamesHRH

          This is the crux of it, although I am not sure I agree.I think that their midrange phone is not a horrible idea. I think that they think they needed to introduce those colours for the teen market.I am not buying that they think they can crack the prepared Cheap market.Why would you? Volume is vanity, margins are sanity.

          1. Pete Griffiths

            “Volume is vanity, margins are sanity.”True in many markets but not all. The danger of this philosophy in the tech world is that platforms and ecosystems benefit hugely from volume. Volume attracts value add and the greater the disparity in volume the greater the gravitational pull of the dominant player. Apple computers became a minor niche player important only in a small number of segments. Wintel dominated because it sucked most of the developer oxygen out of the room. When apps are cheap to build it is possible for developers to support 2 versions but as apps become more sophisticated (expensive to build and support) and as the disparity grows an increasing percentage of developers will vote market leader only. That becomes a very dangerous situation for the smaller player. If we map geography onto the above the situation becomes even more dangerous. Consider China – a gigantic market. And China will require its own apps. Many many many apps are not going to be developed by US companies and ported. The Samsung/Android volume will be so massively greater than the Apple market penetration that there will be little oxygen left to attract Apple/China developers. The disparity in apps will expand and this will likely prove fatal for Apple in this market. You can’t make money – no matter what your margin – if your volumes continue to fall. And they will. And this dynamic is not limited to China – it is prevalent in the developing world and mobile growth markets with huge volume are predominantly in the developing world!Apple is en route to becoming marginalized in mobile just as it was with desktop computers.

    2. laurie kalmanson

      beautiful remembrance. here’s mine…

      1. awaldstein

        Thanks for the share.

    3. William Mougayar

      Yup. That was Marc Benioff’s rant about Apple yesterday. And he’s surprised there is no mention of Steve during these intro events, as if he never existed.The horrors of 9-11 & its worldwide repercussions are still around us, 12 years later. I want the world of pre- 9-11 to come back, one without wars, without surveillance, without searches, without terrorism or extremism, and with security and peace throughout.

      1. pointsnfigures

        We lost a lot more than innocent people on 9/11. Today is a day that we always need to pause and reflect on. Pearl Harbor’s generation still remembers that day (and so should we), and there were other days in our nation’s history that we remember with the same sort of gravitas. 9/11 will forever be a day like that.

        1. William Mougayar

          well said.

        1. William Mougayar

          …but never stopping to remember too.

    4. Dave Pinsen

      If you turn on WNBC-TV now, they are broadcasting the ceremony where they read the names of all who were lost on 9/11. They’re only up to the B’s.It’s a practice with ancient roots. In his novel of Thermopylae, Stephen Pressfield’s Spartans did the same for their fallen after a battle: “No word was spoken but the name. Among the Spartans, this alone is considered the purest form of consecration.”

      1. awaldstein

        What a great comment. I took the morning off and am sitting on the Brambles in the park reflecting.I wish Disqus let you cross comment as I’d love to have this thought in the comment string of my personal post on this this morning.

        1. Dave Pinsen

          Thanks. Feel free to copy and paste if you like.

    5. LE

      People don’t find a leader a leader finds them.Have you ever seen those NYT ads that have a list of requirements for some job at a major university with all the requirements that are needed and accomplishments and interviews to even qualify or be taken seriously? As opposed to the way politics is done. Where having a certain last name can make a difference in winning (or the right looks, smile, tone of voice).

      1. awaldstein

        Maybe, although your point is well taken.There are many (many!) leaders throughout the city in so many different areas.The question this raises which I don’t have the time to dig in nor the answer is how incredibly difficult, no impossible, to run for public office and to be that leader of leaders.Great point.

  6. rich caccappolo

    I hear you – very frustrating, very concerning. Time to focus on making sure Daniel Squadron can win the runoff for Public Advocate. I believe him to be the smartest elected official in the City and I would be happy to see him in that office – he could turn it into a meaningful one and we are going to need it.

  7. Avi Deitcher

    “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.”Brilliant! Love a good zinger!

    1. Aaron Klein

      I’ll take the other side of that trade.As much as I hoped Apple would do something nuts and go down to $450 unsubsidized, they have always refused to play someone else’s game.Apple makes premium products at high margins. They’ve just made a slightly lower-range premium product at a price that mid-range buyers just might stretch up to buy.They have made a simple decision: we are BMW. And we need to have a BMW 3 series to attract first-time BMW buyers.But we are not Toyota.

      1. Dale Allyn

        That was my take, too, Aaron. I had hoped to see the $450 phone as well, but as I look more closely, and as I read a broad range of views on it, It simply looks like Apple being Apple. I’ll bet they sell a boat load of 5c’s, as well as the new 5s. Apple is about premium products and high margins, not about mass market. I expect to see a lot of the 5c in Thailand, as well as a lot of the gold 5s there.

        1. Aaron Klein

          Yep, agreed.

        2. CJ

          Sure, they’ll sell a boatload but the boat is shrinking. And they’re very late on building the replacement. Eventually they’ll be filling a dinghy.

          1. Pete Griffiths

            Totally agree. They are on a dangerous course.Abandon volume = become niche player.

          2. Dale Allyn

            There’s some truth to what you say, but “the pie” is growing as well. Apple make lots of decisions I don’t agree with, but they have the war chest to fund a few missteps without catastrophic outcome. They are in need of meaningful upgrade to the iPhone, but I think we’ll also see them working to influence carriers to leverage subsidized phones in new markets, so that they can continue to market “prestige”.To be clear, I prefer more reasonably priced unlocked phones to any subsidies and contracts.

          3. CJ

            Microsoft thought the same, I’m sure. The parallels between Cook and Ballmer and current Apple and current Microsoft can’t be overstated.While it’ll be hard for Apple to go bankrupt anytime soon, their fate rests on something much more ethereal than cash, the IT factor. They are losing it, only the hardcore think the 5c was a brilliant move. You can’t charge premium prices for products that no one wants. What happens when they have to start discounting prices?

          4. Dale Allyn

            I think it’s a bit more complex than that. I travel a lot (or at least distant) and see a lot of people pining for Apple products and working to get them. I just returned from Thailand and I was blown away by how many people I saw using new Apple products.One large office where I frequent had nearly everyone in the office with iPhone 5 where most had feature phones or Android devices six months and one year ago. On the sky train the apparent mix was more like the market share numbers suggest, but iPads were everywhere.I visited a trade show and iPhones and iPads were abundant, the latter being used in booths as catalogues. There were a few Android tablets, but waaaayyyyy more iPads. Some booths had several iPads on the counters.I’m not suggesting that Apple doesn’t need to be working on another break-out sensation, but outside of this group (A VC, and similar demographics) Apple is still a product group to lust for to some.So I’m just saying that “no one wants” isn’t a fair statement. But as I’ve said here, and elsewhere in this thread, I’d like to see Apple launch another “wow” product, as well as deliver an unlocked phone for a much more reasonable price.

          5. CJ

            I know that they are still popular now, but 2 more years of incremental upgrades will change that. Think about it like this, BlackBerry owned the market, they have a nickname after one’s of the most addicting drugs available and they’re on the verge of going under. It only takes one wrong bet.

          6. Dale Allyn

            We agree that they can’t rely on incremental updates.Believe me, I have issues with what management are doing there. They certainly were willing to make a very bold move with the new Mac Pro. Of course, while I was waiting for a good update, I don’t like the radical nature of that move, so immediately ordered the old, stale MacPro to update my workstation. My point is that they are still innovating and willing to take risks (not always to MY liking). Now we’re ready to see similar big moves in mobile.

          7. CJ

            Indeed, sadly I think the only big move we’ll see is a dividend or share buyback. /sigh

      2. CJ

        I didn’t think they’d go cheap either but they did worse. They went cheap on quality, perceived at least, and didn’t go cheap on price. It’s a catastrophe to quote one of my kids’ favorite cartoons.

      3. Pete Griffiths

        Absolutely right.

      4. Avi Deitcher

        Hmm, interesting. I don’t think that is what is happening here, but that is my opinion. Your view definitely is internally consistent and logical. The 5C as the BMW 3 is a very interesting thought.

      5. Andrew Hoydich

        I agree with you.However there is something to be said about learning from the competition. There is value to staying true to your values and vision. There is also value to adapting and evolving – even if it means compromising/changing who you are a little bit.I’m not saying Apple should have done one thing or the other – I’m not even close to having enough experience or knowledge to make an assessment such as that. I’m just expressing a relevant belief.

  8. William Mougayar

    I’m disappointed with Apple as well. But what made my day yesterday was listening to Marc Benioff talk about Steve Jobs. He said Apple is trying to look like Steve, whereas they should be themselves. That interview is amazing to watch.…As for the mayoral pre-elections, I hope NY ends up with a great mayor.

    1. Avi Deitcher

      I had lunch with a dev manager who does business with Apple. He said over the last 12+ months there has been a noticeable change in how Apple relates to the dev community. They actually listen to customers, are no longer convinced they have all of the answers, and want to work with them. They even gave out emails to senior execs directly to mid-level engineering managers at customers to work with them.I haven’t experienced it firsthand, but my colleague said the cultural change was clear, palpable and conscious.

      1. CJ

        And wrong. Apple doesn’t crowdsource, they dictate. Microsoft crowdsources. The difference is being a leader vs. following the crowd. They need to lead to sustain their stratospheric valuation. To maintain their position, to keep the throne. They’ll lose it all if they don’t stop being scared to fail and failing to deliver.

        1. Avi Deitcher

          You can only dictate so much. They tried dictating the Newton and the Lisa, that didn’t work so well.Personally, I like their ear to the ground.

          1. CJ

            While that’s true, you can’t lead from behind.

    2. Matt Zagaja

      I wonder if part of the disappointment stems from the lack of surprise. In previous years we would have no idea that there was a fingerprint sensor, new colored iPhones, etc. whereas yesterdays announcement confirmed the majority of leaks we already saw.

      1. William Mougayar

        I think it was about the pricing and taking a shot at the lower market segment. I would have really really liked to see a $350 iphone. They could have made a Big dent into Android’s market share.

        1. Pete Griffiths

          I doubt it. And this is why.Apple has its product cycle – it introduces a new model once every x months. And this is true for any low end product.Android has multiple companies with multiple product cycles. It also has Samsung who have a completely different product market strategy to Apple. Instead of a very small number of products Samsung has a raft of low end products, all of which are on tight cycle times.Apple only has one meaningful advantage and that is its ecosystem but that is less important to low end users and in any event this disparity is being addressed at breakneck speed by Google and Samsung.The net effect of this is that no matter what Apple launches there will be an enormous range of Android based competitors that will offer equivalent of better functionality for most low end users and which will be much cheaper.Apple may take the initiative from time to time as it launches a product but it will lose it incredibly quickly because it is facing a fast morphing Hydra.This is a battle Apple can’t win. And they know it.

          1. William Mougayar

            Maybe that’s why they didn’t go there. Howard Lindzon said something a bit similar, about them avoiding the battleground

          2. Pete Griffiths

            I think that’s right. They see little benefit in participating in a race to the bottom as the low end commoditizes as it did with PCs. Unfortunately that has major risks as I outlined in a comment above (see my note on the importance of volume to attract the develoers.)I think Apple’s strategy is to be an innovative design company. To open up new categories and skim as the market leader and take profit on the way down as it commoditizes. Next category will likely be wearables, then no doubt implantables. Howard’s proposed strategy for Apple to buy companies with key apps to infiltrate google as google has infiltrated iphone with apps won’t work. Google is a data science company and Apple isn’t.

  9. kirklove

    #haterStringer won. Smile a little Buster.

    1. fredwilson

      that did make me smile

    2. kidmercury

      how ’bout them eagles! thank god the andy reid era is over and we have a coach who understands the awesomeness of lesean mccoy. that was an ugly win, and perhaps a frightening sign of what is to come, but a win nonetheless in a game i expected them to lose. fly eagles fly!

      1. kirklove

        I thoroughly enjoyed the first half. Pray to Lord Almighty Vick can stay upright. And am in awe of McCoy (he reminds me a bit of Wilbert Montgomery). I hope Chip is for real. He seems to be. Will be interesting. At the very least they are fun to watch now and the players seem to be recharged. The last few years under Reid he’d lost the team and everyone was walking around moribund.A W is a W and I’ll take as many as we can get. Fly Eagles Fly.

        1. Jeff Bodle

          E-A-G-L-E-S EAGLES! I loved watching that video (and the win) with my 8 year old son and going through all the great moments with him, mccoy went to my wife’s high school and all of the great college coaches were all over him before he snapped his leg in high school and then he broke dorsetts records at pitt so you knew he was going to be special i am amazed he slipped out of the first round. just need to hope the defense can continue to improve.

          1. kirklove

            Yup, the Defense will most likely still be our achilles heel. Though for three quarters they looked decent. Eagles always struggle to play complete games.

      2. kirklove

        Kid – you see this? Good stuff. Born and raised in the area it makes me proud.

        1. LE

          See now I think the opposite. I’m waiting for the day that Philly isn’t associated anymore with “Rocky”, steak sandwiches, the Italian Market, Eagles, William Penn at city Hall etc. Enough already with all of that.

          1. kirklove

            AHHHHHH! We part ways. I love all those cheesy traditions and never want to see them go away.You forgot my favorite btw… Soft Pretzels πŸ˜‰

          2. LE

            Please please stop the voices…At least you didn’t turn the vise tighter by mentioning the Mummers.I do like Jim Gardner by the way. And the “big bambino” from what I remember of him when I was young. (Know who that is?)

          3. kirklove

            TWO STREETERS!!! ;)Nope on Big Bambino. That’s Babe Ruth’s and should never be copped.

    3. JamesHRH

      That was a nice surprise.

  10. Mike Geer (MG)

    More and more so technology does one common thing: It decentralizes power and gives it directly to the people. Because of this beautiful thing, we no longer need to wait for a corporation or a city mayor to change the world around us for the better.Be happy, Fred (and AVC community), it is all up to us, the people, to make things great. So take that morning run, drink that double espresso and get at it πŸ˜‰

  11. Tommy Chen

    Apple doesn’t create cheap products, never have and never will. They play to there strengths and target specific markets, and we all know they’re going to sell boat loads of the new iPhone 5C and 5S. I don’t understand the obsession with everyone wanting them to create a cheap phone. There are plenty of players that are doing that already.

    1. fredwilson

      It’s not about the phoneIt’s about the services that run on tip of themGoogle is wining that war with a market share strategy and Apple is going niche againSad

      1. SubstrateUndertow

        You may be right but the whole mobile internet-of-things dance may turn out to be much more complex than that ?iBeacon !

  12. Jorge M. Torres

    NYC in the 90s? Thought you would have said NYC in the 70s given the City’s budget problems, stagnant real economy, gang violence in the poorest communities, and record homelessness.

    1. fredwilson

      Even worse back then

      1. Avi Deitcher

        Ha! I came on a visit to NYC in the late 70s with some family friends, went out for a walk in Manhattan with a friend (we were <10 yrs old) to Macy’s to check out the electronics or toys or something. Bunch of 8-yr-old boys out on a walk in NYC of late 1970s. Dumb to do.Lots of NYPD waiting for us when we came back to the hotel. Still not sure how we came back in one piece.

        1. ShanaC

          kids used to just do that in that era

        2. JLM

          .There is dumb and then there is this —In the 1950s, I got lost at a NYC Thanksgiving day parade. We lived in NJ and had lots of cousins and kin in NYC. We used to love to go to the parade. I think my Father was overseas.I got out to the edge of the parade masses on the sidewalk and took off walking following a float. Nobody could see me because I was, well, short. Very short.When the parade ended, I realized I was lost and turned myself into a cop. I remember the cop like it was yesterday. He was a big Irishman.I said: “Hey, I think I’m lost.”He said: “Are you now, laddie?” I remember him towering over me and saying: “Well, we’ll just see about that now.” I remember taking his hand and walking with him. Holding his hand was like salvation and comfort. The cop took me to a station house.My Uncle Jim was a Detective big wig in NYC and went to all the station houses in the Manhattan area. Uncle Jim was the most unflappable man I ever met. He apparently assured my frantic Mother that he would find me. She thought I was being cooked and eaten, I am sure.There I was eating ice cream and sitting on the Sergeant’s desk. In comes Uncle Jim.No recriminations or bluster or emotion, just: “Your Mother is looking for you, Jeffrey.”I remember that reunion and my solemn promise never to wander off again and never, ever to tell my Father.JLM.

          1. Russell

            Great story

          2. LE

            All I can think is that nobody took a picture of you eating that ice cream in the station house. How cool would that be today?

          3. JamesHRH

            That’s a great story, with the most JLMish moment being ‘I realized I was lost and turned myself into a cop’.How old were you? 5 or 6?Classic JLM composure & situational awareness.

          4. JLM

            I was 5. I knew the cops were the good guys.

        3. LE

          Remember being in a hotel with my older cousin in the 70’s (The Sheraton I think) and looking out the window and my cousin saying “those are $200 hookers”. That’s over $800 in today’s dollars it turns out according to the inflation converter.

          1. JamesHRH

            Everyone should have that cousin.

          2. Avi Deitcher

            Hmm, could be fascinating, doing an inflation analysis on that industry. I wonder what would qualify as “deductible expenses” for the IRS!

          3. LE

            Pricing sometimes tends to move in a way such that you can’t easily convert with inflation.For example if a prostitute costs $1000 today and that translates to $237.50 in 1970’s dollars obv. that wouldn’t be the 1970’s cost. It would be probably $200 or $250 something like that. And no hooker today would charge $1050 if that is what $300 translated to from another point in time.Or taking cars, Mercedes might have priced a car to be “under $30,000” but that doesn’t have the same effect as “under $70,000” today.

      2. Dave Pinsen

        It was a dying city.

    2. ShanaC

      You know, you;ve seen a lot of change in the city. What do you think the big needs are in terms of change now

      1. Jorge M. Torres

        Each of the problems listed in my original comment are problems the City is facing today. In a lot of ways and for lots of people, it’s the 70s all over again for NYC.

    3. Kirsten Lambertsen

      I read somewhere once that the city was at its highest crime rate ever, in the ’90’s – not the ’70’s. Apparently due to crack.I moved here in 1989. It’s gotten so much better. In those days, you couldn’t go to past 1st Ave downtown. But you felt like a badass when you did πŸ˜‰

      1. Jorge M. Torres

        ’89 was the heart of the Crack Age for sure. The murder rate certainly peaked in the 90s. But crime actually started to subside towards the end of Dinkins and the decline carried over into Giuliani’s administration (’93 into ’94) – a trend whose causes have been endlessly debated. The 70s in NYC had a general sense of sustained lawlessness – the decade opened with the Hard Hat Riot and ended with the blackout in ’77 and the fires in the Bronx. In the 90s, NYC had a fever for a couple of days. In the 70s, it had pneumonia for a month.

    4. Elia Freedman

      Murder rate followed the use of leaded gasoline. Don’t know if that is causal or not, but interesting all the same.

  13. Brad Lindenberg

    Agree about the 5C. I keep thinking #whatwouldstevedo….

  14. Jan Schultink

    4S unlocked with 8GB: $450They could have knocked the price of that one downBut then, the GBs on the phone become less important now that music, movies, and photos are in the cloud.I think the colourful C will take a lot of sales from the S in the segment of people upgrading from 4 and 4S.

    1. JamesHRH

      Jan, I think this is a really interesting idea.Absolutely blow out left over out of date models at the low end.i don’t think it hurts the brand.

  15. kidmercury

    happy 9/11 everyone. today is the most important day in american history, perhaps world history. the death of 3,000+ of our brothers and sisters plus the subsequent wars were not in vain; they allowed a countless number of us to awaken to kookology. amongst kooks 9/11 is half-jokingly referred to as the gateway drug; you start with 9/11, then next thing you know you’re researching a breakaway civilization with free energy, a hidden financial system, teleportation, time travel, extraterrestrials, and much more.kookology ain’t a fad, it’s a trend. don’t be the last on board, that’s just embarrassing.9/11 was an inside job,kid mercury

    1. JimHirshfield

      ^^ Expected ^^

      1. kidmercury

        repetition is my forte! it’s only a matter of time before the brainiacs at disqus incorporate some predictive typing at which point i won’t even need to type anymore — just hit submit! πŸ™‚

        1. JimHirshfield

          Hahaha. Try Ctrl-C / Ctrl-V

          1. James Ferguson @kWIQly

            Ctrl-C / Ctrl-VNice way of saying you are Ctrl-C / Ctrl-V ing yourself

    2. SubstrateUndertow

      Trouble is that kooks and iconoclasts are some times hard to differentiate.”9/11 was an inside job”Kook or Iconoclast ?Human transmitters and human receivers are so often like encoders and decoders that pass in the night. You get to send out your message and we all get to decide what it means !Just to be clear you’re looking like an iconoclasts from over here.

  16. Corbett Morgan

    Accepted awhile ago that Apple will not be the company that gets a smartphone in every hand around the globe. They obviously go for the top tier of the global market, but the resale / refurb market could be interesting in years to come as it’s standard for Americans to toss their phones every couple years.So no shocker that there wasn’t a truly “cheap” option announced. I was more excited to see iBeacon. With acquisition of WifiSlam I think there are some cool things to come on this front. Always good to see companies squeezing more innovation out of established technologies like Bluetooth.

  17. kidmercury

    “It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.”#ohsnap #brutal #truthhurtsi agree totally. $100 discount does nothing. they would have been better off raising the price of 5S higher, since the S is for sucker. also 5Sucker has disruptive elements 5Clueless does not, so now you have the fragmentation issue that was so deeply feared. this is in addition to the two different sized ipads. the folks at apple need to re-read innovator’s solution. (although we all do…..that’s like sacred scripture…..)

  18. Tracey Jackson

    Looking at my Twiiter feed, people seem more concerned and upset by the new iPhone than they do about the elections, Syria and what might happen there, or the fact that today is 9/11 anniversary. That says a lot.

    1. Avi Deitcher

      That is disturbing. But could it be the subsegment of people who use Twitter, as opposed to the larger populace? Or just a selection of who you follow, i.e. tech writers who will write about Apple more than Syria?

      1. Tracey Jackson

        I follow a really wide group. Writers. Journalists. A few politicos. Gratitude bloggers. Fashion bloggers. Media. Tech. I’m not saying there were none.But not what you would think at all. One about Syria by my friend Bobby Ghosh who is editor at Time. But ya know. A few years ago, it would have been full. People move on I guess. Blogher said, “How many 9/11s will we count.”

        1. Avi Deitcher

          So a fairly broad cross-section. Unfortunate result. Thousands of people lost their lives that day, we should never let them slide.

          1. Tracey Jackson

            I think sadly we forget. I’m guilty too. I have an entire website on gratitude and trust i run with the songwriter Paul Williams. We debated last night between a Gandhi quote and one by George Carlin, in response to the chance of another war.We went with “Fighting for peace is like screwing for virginity” Carlin won. Woke up this morning and went f..k what were we thinking? Today is 9/11.

          2. awaldstein

            The lack of a memorial is part of the issue.I really like what they’ve built using space as the currency of respect and the fountains on the foundation space.Just taken so so long and still unfinished. People need a place to memorialize and attach their memories to.

          3. pointsnfigures

            In Chicago, it’s hard to find a place that will memorialize it today. Sad. Don’t even know if the trading arenas will have a moment of silence…..

          4. Avi Deitcher

            I was in Chicago on 9/11. Walked the downtown all day and much of the night. Was incredibly moving.

          5. awaldstein

            There is a localness to 9/11 that I touched on lightly I’m my post. There was a play The Guys that played for a year downtown that addressed the downtown/uptown gap even.

        2. ShanaC

          I’m at the point where I want to move on from a depressing day to a celebrate NYC and immigration sort of day.The one thing that bothers me – most offices in NYC still don’t take fire drills seriously. Even if it is not a terrorist attack – you should evacuate quickly when told to, and there should be a headcount (in newer buildings, you should know who has entered and exited)

    2. awaldstein

      Yup…I see the same.Blurted out a remembrance post early this morning. Tumblr (leading with a photo) is very 9/11 conscious. Twitter less so. And on Facebook, just about zilch.

      1. Elia Freedman

        It was a nice post, Arnold.

        1. awaldstein

          Thanks! Was easy and quick and fulfilling to write.

      2. Aaron Klein

        Loved your post. It was great.

        1. awaldstein

          Thanks–been awhile since I woke up at 4 and just pounded it out. Expressing more than writing. Cool when it happens honestly.

    3. Carl Rahn Griffith

      Absolutely. Well said.I mean, after all, it’s only a bloody ‘smart’ phone. Who gives a damn in the grand scheme of things?

    4. baba12

      we are a nation with ADD. We will pose with the troops and claim to support them like what Andrew Bacevich says you are numbed you tend to not react much.Mr.Wilson (Fred) is in the minority in this city in that he earns a lot of money and in the last 15 year his net worth has doubled probably in the last 15 years. In the same period many of the folks who live and work in the city have seen their income go down in real terms. Cost of living has gone up while either their wages have remained the same or gone down.I am not sure any public policy would have made any changes to that equation.If you are super rich or poor then probably public policies affect you, but for most of us life continues to be the same.Talking abut the iphone, The folks at Apple have never and should never be competing on price nor should they be targeting the segment that is price sensitive.Microsoft/Nokia will deliver a $50 smart phone not necessarily in the U.S. but in Africa, India and parts of South America and Asia not China. But that is about 2Billion phones and they will do a fine job catering to those at the bottom of the pyramid. Apple should stay at the top and continue to focus on design which then tends to trickle down over time.We will have ceremonies to mark 9/11/anniversary and then go back to our regularly programmed show, thats how numb we have become as a society.

      1. JLM

        .Bacevich is a very interesting read. He has the credentials of being a West Pointer, Viet Nam era combat vet and a Phd.What a lot of folks may not know is that his son was killed in Iraq in 2007. That grounds one’s thoughts pretty damn solidly.I find his criticism a bit too strident but his voice is one with great authority.It is difficult not to agree that virtually all American military adventurism since 9-11 has been universally fruitless.The view amongst the political/military Illuminati that the US should fight quick, inexpensive, punitive wars is one I embrace.We rarely really change the world, the world changes us.We do things today in the name of fighting terror that we would never contemplate having done absent that influence.While I am a growing skeptic about big military operations, the men in the shadows who are routinely killing terrorists quietly in the dark get my full support.JLM.

        1. baba12

          I would say as long as they are killing those they can show clearly are planning or in the process of attacking U.S. it all fine.But one person’s terrorist is another persons freedom fighter.There was a time when the U.S. government did not ban Irish Americans supporting the IRA, be it with funds or armaments. Peter King the congressman from Long Island was a big time supporter of the IRA.I am not sure it is healthy to fund/arm/train etc groups of folks meant to overthrow governments elsewhere. It is very much possible that it can come and bite us very badly.I’d rather use market forces to get the relevant changes.In 2008 we sent people to Syria for extra rendition and Assad was our man. NYC under a new mayor who is not a carbon copy of Bloomberg would be welcome, maybe we shall see roads in the poorer parts of the city get paved and repaired. Maybe we shall see a setting up of the NYC Municipal broadband service that would be beneficial to many more.Andrew Bacevich is asking folks to think carefully and I think he has a better handle on what we should not be doing.

          1. PhilipSugar

            Very good points. I think that in strategy it is understood it is more important about what you do not do versus what you do.Completely lost on the government. Same about producing a cheap iPhone.

    5. kidmercury

      people don’t care. part of me doesn’t blame them. how long are people supposed to sob for? only the kooks are indefatigable, because they are mission-driven. #kookpride

      1. Carl Rahn Griffith

        As ever, Russia Today is proving to be one of the best news/analysis channels on TV.

        1. kidmercury

          #upvoted. i like russia today. they do a good job of maintaining kook cred while presenting information in a format that is friendly to the more mainstream.

      2. Tracey Jackson

        I cant tell if you mean what you say sometimes or you are a provocateur. Haven’t been here long enough to know. I think had you lost someone you loved you might sob like kook on this day for the rest of your life. I was just in the gym with a woman whose husband was speaking at a conference at Windows on the World that morning. Was one of those great stories, late by 20 minutes. Saved his life. 150 of their friends and colleagues perished. Today still makes her sad. Is she a kook? Not in my book.

        1. Cam MacRae

          Kid is well known to be a kook.He means what he says and says what he means. Mostly.

        2. kidmercury

          i both mean what i say and am a provocateur.sorry about your friend. those who lost someone are usually most inclined to be kooks. there are 4 women who lost their husbands on 9/11 and have gone on to make a 9/11 truth documentary.

          1. LE

            Makes sense that kookology would be driven by emotion as opposed to rationality.

          2. kidmercury

            if you ever wish to have a factual debate about kookology let me know. then we’ll see whose rational and whose purely emotional.kooks use facts to fuel their emotion.

          3. LE

            “if you ever wish to have a factual debate about kookology”In reply to that I say “I take the arnold waldstein” and exercise my right not to engage!

          4. kidmercury

            of course not, because there’s nothing you can say that’s true, so it’s best to keep your mouth shut.

      3. Elia Freedman

        I think people do care but they care most about the things that directly effect their lives. Syria, NSA, et al, seem like external things that don’t impact us. (Us pejoratively, not you and me specifically.) We have managed, whether because of our own excesses or government’s ability, to separate the vast majority of us from day to day events. So the iPhone, which costs me money, takes on an outsized feel, while Syria, which even if we went to war wouldn’t cost me any family members unless they volunteered, has little meaning half a world away.

      4. Brandon Burns


    6. William Mougayar

      You’re right on that. Even TV mentions of 9-11 are scant.

    7. JamesHRH

      I listen to Bloomberrg radio as part of my morning media selections. They do a nice job on 9/11.

      1. Tracey Jackson

        I was just in the gym, TV full of it. Old media pulls through in this case. All the local and many national stations are doing something or picking up the feed from time to time. It’s good!

    8. ShanaC

      We’ve always been a bit insular from our own problems

    9. Matt A. Myers

      It says technology is important to people, and until people have all of the technology they need – and aren’t using it as a means to function in a highly competitive time-crunched ecosystem due to capitalistic pressures – only those who have more free time, or any free time, will have the freedom to contemplate otherwise.

    10. William Mougayar

      The World’s Anxiety Index level is at 71%, not surprisingly the highest at 82% in MEA.

      1. awaldstein

        scary stuff.

    11. sigmaalgebra

      > iPhone? I couldn’t care less. I’ve got a phoneright in front of me, connected so that a littleeditor macro can dial essentially any phone numberon my computer, and the cost is low and the voicequality great. When away from my desk, I don’t wantto take phone calls. So, I f’get about mobilephones.> elections? I live 70 miles north of Wall Streetso can’t vote in the NYC elections and, really, amnot much affected by what happens in NYC andcouldn’t do anything about it anyway. I’ve heard ofBloomberg for years, especially from his use ofcomputing and his connections with Johns Hopkinswhere I went to school, but for the other people inNYC politics I’ve never heard of them. So, I f’getabout NYC politics and am glad to leave it up toFred!> Syria? I gave my reasons for doing a f’get aboutit on Syria in…and there explained why I believed that Obamaactually would do next to nothing on Syria but wouldsay a lot of words about executing militaryoperations in Syria but then find a way to weasel(back) out.> 9/11? A few wackos with airline tickets and boxcutters sucker punched the US and got the US tothrow away several trillion dollars and a lot ofgreat US lives on nearly totally useless, worthless,pointless, wasteful, uninformed, misinformed, badlyplanned and executed, absurd, net highlydestructive, ‘foreign adventures’, trash ourcommercial air transportation system, trash ourConstitution, turn our government against UScitizens and into bullies in the world, damage oureconomy, and take 12 years to put up One World TradeCenter. Bummer. We blew it, and I want to f’getabout it.I have better things to do today.

      1. KG18

        actually if you live 70 miles north of Wall St. – what happens in NYC ABSOLUTELY affects you. Considering it is the jobs engine of the area and produces most of the tax revenue for the state – that affects everything in your area from property value to state funded projects.

        1. sigmaalgebra

          > what happens in NYC ABSOLUTELY affects youWell, yes, you win, but the effect is not verydirect, or whatever I would do toward NYC politicswould be several steps of indirection from affectingme.Besides, I don’t understand the NYC or NY economies!E.g., for my area, if draw a ring around it, a lotof products and services come in and as far as I cantell very little in products or services go out.So, I don’t know how the place keeps going.For “jobs”, I’m creating my own via my startup, andas far as I can tell mostly all I need is just agood Internet connection. Eventually some parts ofNYC business — legal, advertising, media, finance– could help my startup, but that’s down the road,and paying attention to NYC politics won’t help meget down that road quickly now.But, you are correct: Syria’s not my problem,either: The US military doesn’t want me, and I cando next to nothing to influence what the US does onSyria. I did a little — called my Representativeand two Senators, mentioned Syria in my post justabove, and there referenced a longer statement onSyria from earlier here on AVC. My efforts are noteven a drop in the bucket.But, again, my reading of Obama is that he will saya lot of words, do nothing he could get blamed for,actually do nothing on Syria, and find a way toweasel (back) out, e.g., use Putin, Assad, Kerry,the Saudis, the Germans, …. No end ofopportunities.Okay with me: I don’t want us to do anything inSyria. Just f’get about Syria. Let the last personalive in Syria turn out the lights. My reading isthat there was nearly no chance he would do anythingin Syria anyway.

    12. Andrew Hoydich

      Yup. And yesterday it was Miley Cyrus. The majority has made it very clear that they don’t want to be bothered by real difficulties that are really happening. They prefer to remain distracted.

      1. Tangshan

        But an anniversary of a tragedy isn’t a “real difficulty”. It’s just an anniversary. There are plenty of anniversaries of even more horrific events. Where was all of this sympathy on 8/6, or 8/9, or 12/7, or 4/18, or 5/7, or 6/6, or 6/28?People like Tracey lament that we’re not paying homage to 9/11 because we have a short memory, but ignore any horrific event that they didn’t see broadcast live on TV, even if the single-day death toll was hundreds of times greater. I don’t think I’m the one with the bad memory here.Am I a bad person because I don’t think that the 9/11 victims are any more deserving of my respect than the 10,000 who died on the Normandy beach on D-day, or the 100,000 Japanese civilians who were killed by nuclear weapons, or the half million who died in the Tangshan earthquake?These were all horrible tragedies. Even if you only count events where a large group of people were killed in one place on a single day (and not, for example, “drunk drivers”, which are even more deadly, but geographically and temporally dispersed), there are dozens if not hundreds of other anniversaries we should be observing. It’s not that a new phone is so great. It’s that history has already filled our calendars with the blood of our ancestors. Should we mourn every day?You are probably fortunate that 9/11 is the first instance where you had a friend or a friend-of-a-friend directly affected by the killing. When you’ve got friends who have told you stories of their families surviving concentration camps and nuclear weapons, you don’t see 9/11 as such a unique event.

        1. Andrew Hoydich

          You’re right. If people REALLY CARED they would try to mourn the loss of everyone who died…EVER. But because they don’t try to mourn the loss of everyone who died EVER they in fact actually don’t care and should stop mourning anything and anyone. They are fake and need to snap out of their little carefully constructed realities where they are the most thoughtful people in the world because they put flowers at ground zero and raise they American Flag for a day.You have an incredibly cynical perspective, not that there is anything wrong with that, and it displays both an understanding & disconnect with human nature. Humans have the capability to show compassion, but that pool of compassion isn’t infinite. People can only handle so much. Most of them do not have infinite strength & do an amazing job at remembering, hearing, seeing, realizing, and feeling only what they want (and what they can handle) – not what is real.You understand that people are fake and selfish.You don’t understand (or maybe you do) that that is just the way it’s going to be. You are like someone out of the matrix trying to tell someone in the matrix that the matrix exists.Pointing out that anniversaries of tragedies litter our calender won’t and shouldn’t stop people from mourning losses that are important to them. People need their ceremonies. Right now it’s 9/11, a few years from now it will be something else.Balance needs people who keep the big picture in mind and it needs the people who see tiny fragments of the picture. We keep each other in check.I don’t think you’re a bad person.

          1. rickbynight

            When does the shift happen, or are you perhaps witnessing it right now? Where is the line? “The majority has made it very clear that they don’t want to be bothered by real difficulties that are really happening.” That may well be true, but posting about iPhones on 9/11 ain’t verification of this fact.

          2. Andrew Hoydich

            The shift? Not sure what you’re talking about.I agree – this ain’t verification of this fact. It’s not even a fact. Just an opinion.

          3. Andrew Hoydich

            What shift? Not sure what you’re talking about.I agree – posting about iphones on 9/11 isn’t verification of this fact. It’s not even a fact. More of an opinion.

          4. rickbynight

            The shift = the transition from “this is the most important thing ever to never forget and remind ourselves of” to “that was a thing that happened in the past that was horrible and I just learned about it in a history book.”

          5. Andrew Hoydich

            Ah ok.It’s a constant disintegration, not something that starts/stops or has to hit a line. There may be a certain threshold where the disintegration starts to accelerate (or passes into the “history book zone”) but for the most part – every second that passes the memory loses potency.What are your thoughts?

  19. Dave Pinsen

    The other thing is screen size. The 5 was a little larger than my 4S, and I’ll upgrade to the 5S now that my 2 year contract is up, but the other day I used someone’s Samsung phone to take a video for them and its screen made even an iPhone 5’s look tiny in comparison.

    1. Andrew Kennedy

      I’ve got a samsung S3 that I use for testing and my personal phone is iphone 5. The big screen is great, but the issue I have with the S3 is that in many cases it takes 2 hands to operate, one to hold the phone and one to navigate.

      1. Dave Pinsen

        I can see that. That’s the case with shooting video with the iPhone anyway, so I didn’t notice it at the time.

    2. LE

      I’m always noting how people fixate on a contract expiration as a reason to change or not. And I’m talking about people where money isn’t really the issue. Just the fact that people feel as if the contract isn’t up and the phone costs them a bit more they have a hard time with that. That’s a barrier that the phone companies need to work on to get more sales. [1] Present the numbers in a way that people won’t automatically think “I need to wait until X” to buy the new phone. (I know there are variations on doing this but people still think that way).[1] Even if it’s “upgrade before your expiration and we’ll give your kid a pony”.

      1. Dave Pinsen

        Well, it’s not as if there was some new feature that came out with the iPhone 5 that made me feel I had to get it. I’m pretty happy with the 4s. More recently, I’ve started to feel the screen’s a little small. And my Otter Box is starting to wear out, so that, plus the contract expiration, plus the new phone together prompt me to make a change.

  20. jason wright

    so now a mugger chops my finger off? i think not.

    1. SubstrateUndertow

      Are you sayingyou’re not giving the 5S the finger ?

      1. jason wright

        ha.maybe. the prices are silly. the competition must be tittering behind their hands with delight and relief.

  21. James Ferguson @kWIQly

    In the US people say : I could care lesswhereas in the UK we say: I could not care lessSo regards the iCouldNotCareLess device range iCouldCareLessexpensive fashion excessories (sic) are wholly uninteresting.Syria, US-Russian relations, US consulate in Benghazi, 9/11Take your pick they each need thought and attention

  22. Barabare

    There’s a great analysis of the 5C here:…While the pricing may be high now, Apple now has a lower-tier line that they can price appropriately. I would not be surprised if they do price it more aggressively over the coming years.Also, Fred, any insight on Piki’s decision to shut down yesterday? I really loved the app; it was beautifully designed and it was my favorite source of “radio.” It always played great stuff for me. It seemed like a bit of a ghost town – which is why I’m guessing they shut down – but I never saw them do anything aggressive to try to acquire users. Really sad they gave up so soon πŸ™

  23. Shoe On Head

    this is not about a land grab under the demand curve. apple could have done this a long (long) time ago.slightly hubris strategy. largely buoyed by the relief Ive has pulled off iOS7. and a genuine belief in the medium-term it will outcompete everything else.belief? building OS network effects on the basis of product β€” not mostly disrupts ‘markets’ on price. not ‘product’ on price (e.g. PC market was disrupted tablet/phone).(shoe on head)

  24. BillMcNeely

    First, Fred, I never understood why cell phones then smartphones were subsidized in this country. How did that become the norm?Second, my first day in the Army was 9/11 but by the time I made it to FT Benning a week had passed. I will never forget the guy from NYC who still came after losing his Firefighter uncle that day.

    1. LE

      First, Fred, I never understood why cell phones then smartphones were subsidized in this country. How did that become the norm?Well anytime you have a product that is high priced it makes sense to present the cost as a monthly cost vs. a one time fee.Many goods are sold this way. You pay for houses over time and you commit to ownership for a long time by buying it. Many people pay for cars over time (bank loans or leases) the idea being that a monthly payment seems smaller than a big one time payment. Furniture also off the top. College education. Endless list. High price divided by time = low psychological barrier to selling the product.The bottom line is that it costs what it costs to market and sell a product like a phone. The person selling the product needs some guarantee that they will get their money back.So the question isn’t why are we doing it this way it’s why it’s done differently elsewhere.

      1. BillMcNeely

        From the Middle East perspective they don’t like credit and charging interest is against Islam.Its a more cash and carry society.

        1. LE

          There is no doubt that credit gets people into trouble.That said, as a basic concept it actually makes plenty of sense to pay over time for something that you will use over time.Not to mention the fact that expansion of credit in this country is what is responsible for so much positive economic activity. (Mortgages, credit cards as two examples).How many people could afford those things if they weren’t able to pay for them over the time that they use the asset?

          1. BillMcNeely

            Not many.When I was selling cars I actually came to the conclusion that leasing cars was the best solution for most people. Fairly low cost and most people never own their car anyway.In the Middle East that’s why you see folks wait until after 30 to get married and then live with their parents until they can save for a house. Often times interest free loans are provided by the government but only to citizens and only at the time weddings and birth of a child.

  25. RichardF

    I don’t know Fred I think in the Western World as a whole, the contract route for phone ownership is the norm. Apple are right to concentrate on that market, it’s where the dollars are from all the added value stuff and that’s really where the GOOG are focused, if the rest of the world adopts Android in whatever version, carrier forked or handset maker forked well then happy days for them. I’m not so worried about the GOOG I don’t think Apple are going to be their competition I think Microsoft are, they are late to the party but not too late. They have still penetrated enough of everyone’s lives to be able to leverage it to convert into mobile sales. Lets be honest if Microsoft have got Facebook and Angry Birds in their app store the majority are going to be happyAs long as competition exists and users have an option to switch then the market will prevail, I remember when I had my first iPhone I didn’t think I would be able to switch away from Apple because it was easily the best smart phone on the market, Android and Samsung soon caught up and now I wouldn’t touch IOS with a barge poll. Actually what I would like is for someone to manufacture a high end phone the same size as the Galaxy S2 instead of the current trend for bigger and bigger screens, I don’t want to have to cart a mini tablet around in my pocket all day.

    1. ShanaC

      the only place where contracts are the norm is the us

      1. RichardF

        er no Shana you are wrong they are the norm here in the UK, certainly in the smartphone market

        1. ShanaC

          and in central europe? asia with western characteristics (s. korea?)

          1. Ana Milicevic

            (+ @RichardF) I wouldn’t say they’re the norm to the same extent as they are in the US: while they may be for premium handsets, there’s usually a pretty decent prepaid/no-contract option available. I tend to use the prepaids heavily with an unlocked phone when traveling. In the US until fairly recently good prepaid options were few and far between.What I find interesting is that a 2-year contract for a premium device is no longer a good option when device upgrade cycles are getting shorter and shorter. For example, I bought the Galaxy S3 the month it came out and my cellphone carrier would not consider me eligible for the upgrade to the Galaxy S4 now. I’m intrigued by the new pricing model from Verizon where you’re essentially paying a rental fee for a premium device.

          2. Ricardo Diz

            Portugal also uses contracts to get customers to get iPhones…

      2. Dale Allyn

        It’s happening in Thailand, too. True, Hutch, dtac, AIS. I expect we’ll see the model grow.I’m not thrilled by Apple’s new offerings (particularly the 5c), but just commenting on the growing trend of contracts and subsidies.

      3. Dale Allyn

        Shana, I thought you may find this of interest:…Japan is pushing contracts quite heavily as well.

    2. SubstrateUndertow

      I think the real market BOMB for Apple is iBeacon.Micro-location(50M) triggered small-data-packet interactions between smart devices that pass in the night or live in proximity to each other are not just about indoor location and customized location-base-advertising.They are Apples ground fabric for a location-based, oganically-triggered, dymanically-intactive, intranet-of-things, a localized neural-net nervous system for stationary or interloping smart devices.The possibilities are endless!

      1. Dale Allyn

        For those who want an explanation of iBeacon, this is a pretty good post:…I’m one to turn off all such things (and location services) until needed, but many will leave them on by default.

  26. Mark Essel

    “Tired cranky and annoyed” Sounds like a fantastic time for a bike ride

  27. MC

    “Who would sign a contract for two years to get aphone that is two generations old?” I think many people will. A lot of people are attracted to a “free” phone and find the differences in iphone iterations to be insignificant.

  28. kevinmurphy

    a real basic question- as I too am disappointed in the new Apple offerings- how do I switch from an old apple phone to a larger screen android based model and deal with the fact that everything I do is in the dreaded Apple ecosystem? (iMac, iPad, Laptop and of coarse iTunes) I know you (Fred) have posted about his often-maybe you could point me to an appropriate old Musing…

  29. pointsnfigures

    so far Mr Market is telling $AAPL to take a hike.

    1. LE

      Just a delta because of what they thought would happen vs. what actually happened. A change of expectation correction.

  30. Mark

    Try Detroit. πŸ™‚

  31. Vish

    Fred – We are all being a little to critical on Apple before fully understanding their strategy. I remember when the iPhone was first introduced and wall street was going “No one is going to pay that kind of money for these phones”. I think Apple gets market share (look- they just made iworks free), but they probably want to do it the right way. Till we know what it really costs Apple to make the 5C, we should hold off on judgement because the higher the margins on the phone, the more their ability to subsidize the phones through exclusive carrier deals in emerging markets. Yes, retail price is high, but what could their price to China Mobile be in exchange for volume guarantees? There is more to this than meets the eye.

  32. Matt A. Myers

    “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.”This gave me a really big smile. πŸ˜€

    1. $1780069

      Vast majority? Vast majority of dumb phones are now counted as ‘Android’ and they never report sales, only activations. A phone can be activated multiple times. Bottom line, Android stats are as bogus and lacking as their ecosystem.

  33. ShanaC

    What about the biometrics in the more-expensive phone? What does the community think about that

    1. kidmercury

      i was very impressed. seriously. biometrics is a major breakthrough; an enabling technology that will allow for many disruptions. it does make tech even creepier, though, and i think we may get a backlash against technology soon.

    2. LE

      To me that’s great and especially since I feel that Apple will get that part right and it will actually work the way it should.

    3. Ricardo Diz

      I’m impressed by how Apple seem to have executed the fingerprint feature. I love the feature.Also, it could be the trojan horse for a payments service in the future…

  34. Bernardo

    About the iPhone: Fred, all is not lost. Yet.Apple did not release, AFAIK, prices for the unsubsidized 5c, specially outside of the US. I imagine the 5c must have pretty high margins. They could decide to slash the 5c prices down in the developing world, and still keep a decent average margin on the device. Perhaps shaving off an extra $100 in it’s unsubsidized price ($350). Perhaps more on the 4s ($299).In the US Apple’s strategy, seems to be working ($99 is a “no brainer” price, if you are going on contract anyway). If they did that in unsubsidized markets they would become competitive there as well.We will know in a couple of days. I live in Brazil and feel your pain: nobody can afford an iPhone here, specially when compared to Android. Android is all you see in people’s hands.Apple was already (modestly) doing it here in Brazil with its low end device: the iPhone 4 costs about $400, while the iPhone 5 costs $1.000. They are selling the iPhone 4 here cheaper than in the US, despite all the horrible taxes and added costs of the Brazilian market.

    1. Bernardo

      Lost hope: 5c to cost 4500 yuan ($730) and 5s 5300 yuan ($870) in China. They must keep the iPhone 4 on sale in the poorer markets, though. (It is a good Phone, I wouldn’t trade it for a S4).The market will speak, but I believe next year we will see a less arrogant Apple.

  35. LE

    Who would sign a contract for two years to get a phone that is two years old?The obvious answer to this is that most people don’t track that sort of thing (date when a phone is released) and don’t consider it at all in a buying decision.While for some people phones are the same as fashion is for people in the fashion industry (where things get old after a year) most “normals” don’t consider this. This is an artifact of this business and this industry.I remember years ago when I took a cruise spending time researching how old the cruise ships were and targeting ships that had been built in the past 3 years. I suspect though that most people don’t care about that at all and don’t take the “build date” into account (when actually it is fairly significant the newer ships have much more to offer than the older ships that have been retrofitted).

  36. LE

    It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.Obviously Apple (or anyone else) can be wrong with their thinking and can make mistakes.But this is no “waterworld”… and do you seriously think that the people at apple didn’t carefully consider the pros and cons of the strategy that they decided to pursue?

  37. LE

    I am tired, cranky, and annoyed. I will get over all of it.When I was a kid, the week before my bar mitzvah, I remember my dad saying (after all that planning that goes into any affair) “eh and if the cook has a fight with their wife you have a bad affair”.(I feel bad for anyone pitching you today, it’s their Bar Mitzvah and they’ve been practicing the last few years for this day).

  38. Steven Kane

    Hi Fred. Apologies, I dont follow NYC local elections all that closely, but I’m confused. If “all you need to do is travel around to parts of the Bronx, Queens, and Brooklyn that fifteen years ago one could not walk into without taking their lives into their hands and marvel at the renaissance in these neighborhoods,” then how did Bill de Blasio come out with such a huge win? Isnt De Blasio’s core argument that the NYC “renaissance”, such as it is, did not extend into the traditionally middle class and working class parts of the city beyond Manhattan?

    1. JamesHRH

      Steve, I am an outsider, but it sure looks like de Blasio did what traditionally works for successful Democratic mayoralty candidates: he focused on African American & union issues.The ‘stop & frisk’ issue is not one I have investigated, but I do not think you need a Ph D in American Policy to know that it is a much more sensitive issue for African Americans.And the African American candidate – Thompson – gave that issue to him.He did something very smart, in that he proposed a specific program that attacks the wealthiest New Yorkers… is voodoo good politics.I stated it yesterday and I will restate it: I would not want a mayor who so brazenly traded on the pigmentation of his children, in order to get elected.His team includes some of the most successful Democratic campaigners of the last decade.He appears to have run a very smart, cynical campaign.Hopefully Lhota pulls off a stunner in the general or Thompson pulls one in the run off (if that occurs).

    2. KG18

      because de Blasio is full of hot air. anyone who doesn’t see the improvement of the South Bronx for example is either blind or delusional. Now if ppl are arguing about being able to “keep up with the Joneses” – then Bill has an argument. If that is the case – then that’s a sad platform.

  39. jason wright

    anything further to report on your geekphone firefox experiment?

  40. beidaren

    you think those pre-paid phone buyers will pay for apps and support developers? get real! 4 xiaomi phone users < 1 iphone user as far as developer money is concerned. I’m sure BMW sell far less cars than GM and very few people can afford BMW, but BMW is doing just fine in China and everywhere else. the pre-paid “smart phone users” are new dumb phone users. Apple just gave a gold (mid) finger to them!

    1. LE

      Cars are a bit different since there is no chicken and egg developer issue with cars.

      1. beidaren

        right, the people with money will buy apps and support the developers. $100 “smart phone’ buyers are of little economic value to developers. Android may have 80% of Chinese market shares, but most don’t pay. as a developer, i don’t really care about them. I care about iOS users who buy my apps. 20% market share > 80% market share for a healthy eco system.

  41. David Petersen

    5C stands for conspicuous, as in conspicuous consumption. Apple is trying to get people in the 3rd world to buy colorful apple phones so they can look rich.

  42. gavin

    Hey Clueless FredI really do wish you knew what your were talking about… for some reason you have a voice out there… just read this link and rethink:

    1. LE

      In 1984 Mercedes introduced the 190e for around $30,000 USD at the time.I remember a competiting dealer specifically telling me “Mercedes had to really cut corners on that one”. I bought one anyway (in 1985 iirc – I was pretty young and to me Mercedes was a status symbol). Although I no longer really like the brand (it’s become to everday) there are enough “others” to make it a huge success.The car was far in price, features and quality from the flagship model they sold and the market they sold to at the time. But they saw it as a gateway to sell people the more expensive cars down the road. This was actually the concept that GM was built on (although admittedly with different brands to cater to different segments of the market).Things worked out for Mercedes. Doesn’t mean you are wrong as far as your point but Fred’s comment isn’t clueless as you are making it out to be. Things in business (as opposed to textbooks) depend on many factors. There is no one formula that works for everyone every time consistently.

  43. beidaren

    Bloomberg was the big loser last night. Voters rejected his enablers. voters blame Christina Quinn for repealing term limit. I feel good about the election results even though I had hoped Bill Thompson would make runoff (he may still do). Blasio is not my first choice, but he’s better than Quinn and Bloomberg.

  44. Pete Griffiths

    Look at it this way – you may be grumpy but there are a lot of happy faces in Korea.

  45. Reykjavik

    Note to self: Send pitch deck to Fred next week.

  46. Ayush Neupane

    … or maybe it means that Apple wants to remain a premium brand and built its moat around that. In doing that, it will have to give up tons of future revenue but they are immensely profitable. Why give up being a premium product by trying to gain more market share? As long as they ensure a strong defensibility, I like what Apple did. It is about maintaining what Apple is about. But the lack of innovation from them is indeed disappointing.

    1. beidaren

      lack of innovation? did you watch the keynote? 64 bits architecture in a phone is not innovation? fingerprint sensor that works is not innovation? just because the talking heads on tv said so, doesn’t make it true.

      1. Ayush Neupane

        Innovation based on what I expect of Apple. Fingerprint sensor is not innovation. Already had that on my laptop couple of years ago.FYI: I don’t have TV and don’t watch TV. I only watch streaming live sports πŸ™‚

        1. beidaren

          LOL, fingerprint on your laptop? you are joking, right? After you see Touch ID on iPhone 5S, your laptop fingerprint scaner is like IBM typewriter in the age of MacBook Pro. LOOOL.

        2. $1780069

          Can you name one thing on Android that is ‘real innovation’? Because I don’t see it. I see a total COPY. Eye-tracking is a parlor trick, only good for stuttering your videos. That is real innovation? Puh-lease. It is designed to make a copycat LOOK innovative. It does NOTHING.What about hand gestures? Could be something to add to the interface, you see this in science fiction, sometimes. But I think it would make you look mentally challenged to WAVE a a device you have in your hand already… is it just me? I don’t think it is.Fingerprint scanning on iPhone is totally new, nothing like earlier technology. It solves (nearly totally) a VERY REAL problem, which is, you need a SECURE password, but everyone, if they use a password at all, is using a 4 digit one that could be found out in about 2 hours.iOS 7 also makes the phone completely unusable if lost or stolen.You saying there is no innovation is just whining on your part. Or is it the case that you are just sadly uninformed?

          1. Ayush Neupane

            iPhone 5s is better, on the hardware side. iOS 7 is better. But these are incremental and not innovative in the way I have come to expect from Apple. On the other hand, Android is not expected to be innovative. They are the free (and thus cheap) alternative to iOS. Thus, they don’t need to be innovative.

  47. Chris Jacob

    In India an iPhone 5c base model will cost over 35,000 rupees assuming direct conversion from $549 USD (avg. monthly income is 5,800 rupees and even middle class might be 25,000 rupees). In China the iPhone 5c base model will cost about 4,500 RMB (avg. monthly Chinese income in Beijing and Shanghai is about this much but a lot less elsewhere). So essentially given the avg. US monthly income is about 4K USD and in the developing world and most non western countries, phones are bought outright, it would be the equivalent if the iPhone 5c was priced at $4,000 here in the US by China standards and a lot more in Indian equivalency.In other words Apple aint winning the 1.5B or more customers in those 2 countries let alone the rest of the world with the iPhone 5c.Agree Fred …. clueless move!(doesn’t help when you see equally clueless articles like this on Mashable following the release

    1. Jack Ives

      Feel sorry also for people who bought the “best phone ever conceived”, being the iPhone 5. Just like the poor original Mar 2012 new iPad owners, their latest and greatest product didn’t even last 12 months before being discontinued. Apple should have just saved R&D and sold the iPhone 4s as their cheap phone

  48. Chris McCoy

    We’re now at “Peak Apple”.…My personal belief is the most disruptive, forward-thinking move by Apple now would be to buy Tesla Motors.Positions them to power the vehicle OS (operating system) and also lead innovation in battery technology (which is a frontier in itself and needs its own Moore’s Law).Could then license enhancements in battery tech and vehicle OS into planes, boats, etc.Would also make sense for them to acquire Uber to boost their vehicle OS.

    1. beidaren

      we had a few of these peaks in the past. Apple’s demise is alway just around corners. these articles and stories appear every time apple announce a new product. Apple just gave a big fat fingers to its critics. do i trust Tim Cook & Jony Ive or the freetards of the world, Tim and Company wins.

      1. Chris McCoy

        commenting with your wallet in mind or with market knowledge?

    2. mdelvecchio

      boat & plane embedded OSes is not apple’s business. thats a small market.

  49. Youssef Rahoui

    I believe that Apple needs a strong new leader that will for sure cognizant and thankful of what SJ accomplished but will be strong enough to show the new way. For the time being, they are stuck in a kind of transition period :/

    1. mdelvecchio

      apple: most profitable PC maker in the business, most profitable mobile device maker in the business, huge app stores, huge music & media stores….biggest and most profitable tech company in american history. but they need a new leader?er, no.

      1. Youssef Rahoui

        This is today and the consequence of ideas that date back from the mid 2000 or even before. The Tech industry evolves at a breathtaking pace and does not forgive any missteps: ask Nokia, ask Microsoft, ask Palm, ask Blackberry, ask MySpace, etc.

  50. BH

    Square could finally have a threat on the horizon if Apple gets into the mobile payments game using thumbprints instead of cards and readers.

  51. Pete Griffiths

    Just saw this on Extreme TechiPhone 5C: A play-it-safe device that milks Apple’s cash cow, but hands the rest of the market to Samsung…pretty much sums it up

    1. Mother Hydra

      Apple has never gone for market share, opting instead for the lion’s share of profits. I just shake my head when people bring this stuff up, haven’t we already established this?

      1. mdelvecchio

        its crazy, isnt it? apple has stated time and again — they dont do junk hardware (cough netbooks). they do high-value hardware for those that want it. plenty do. they leave the low-end race to the bottom for the rest to fight over.

  52. CalebSimpson

    I agree the whole two year contract thing is ridiculous, but I’m wonder what people in other countries pay for their phones? Also, I know plenty of people that would love the “free” phone with a two year contract because they don’t have the cash to shell out up front for a pricier subsidized phone. I would much rather have a two year old phone than a “dumb phone”.

    1. LutherQBlissett

      The salient point here is that in Europe specifically people pay a lot less for mobile service, so it’s possible for operators to incorporate the subsidy into the monthly bill in a variety of ways, and it doesn’t sting: longer or shorter contracts, larger or smaller up-front charges.See, for instance, the Carphone Warehouse matrix of plans and options for the 5C, all on 24-month contracts where the monthly cost ranges between ~$40 and ~$75.http://www.carphonewarehous…When that contract is over, it’s easy to move between carriers. Not so in the US.So I think Fred is half-right. There is a tension between the price points in the US market and the rest of the world. The 5C is a $100 phone in a market where monthly smartphone service is around $80; it’s a $550 phone in markets where that recurring cost is much lower.Here’s where Fred’s wrong: as Benedict Evans has said, the high-end price-point in Europe for a SIM-free unlocked handset is around $350; nobody in the US apart from a tiny group of Nexus 4 buyers is in that market. Apple is still going to sell an absolute bucketload of 5Cs, but it’s not going to give up its $450 subsidy from the carriers and produce something like the Lumia 520/521; American customers can tolerate paying around $100-$150 for a contract-free phone, but that’s about it. Why? Because there’s no cross-carrier compatibility, so there’s no incentive to buy a phone with that flexibility. That’s not changing any time soon.Is that a pact with the devil? Perhaps.

  53. george

    I know you’re disappointed with Apple but I think they got this right for the domestic market. I actually see this device positioned to battle the Galaxy IIIs and Galaxy 4s price tier, where Samsung earned higher profits. Let’s see how the 5c positioning strategy evolves, it just might prove out.

  54. ilyass

    In my opinion they’ll fall in the next period .specially for the Iphone 5C that they think is cheap .look here the reality :

  55. ilyass

    Nice post , but I got a contrary opinion but it’s just the reality ;Look here :and tell me what you think :

  56. Jeremy UK

    Err, here in the UK we don’t tend to pay full price for a phone and stick a SIM in. We buy it on contract. I think most of Europe is the same. Yes we do have “SIM only” but that isn’t what most people do.Actually the 5c is genius, think about it. Essentially it’s an iPhone 5 – a year old phone, but it seems “brand new” to most consumers & it costs less than before.But I think Apple still want to sell you a phone with better margins than the rest of the industry, even if that means selling fewer units. There is more profit in doing it Apple’s way.

  57. The Name Game

    “Who would sign a contract for two years to get a phone that is two years old?”One year (at the time of launch anyway), not two. And quite a lot of people, actually. Have you not been paying attention to sales figures in the past? Not everyone is tech spec-obsessed and quite a few are perfectly happy with last-year’s tech for $100 savings.

    1. mdelvecchio

      hes referring to the 4S, not the C.

  58. andyko

    I think you are wrong about Apple. This is an awesome strategy of theirs. They are going to capture the money and the market share gradually. Lets check back after 1 year. I am betting TC is going to much better than Jobs.About your reaction/conclusion, I would like to say ‘clueless’ without being rude or dis-respectful πŸ™‚

  59. $19820491

    Apple is clueless while they sell billions of dollars worth of products. I wish I was as clueless as Apple.

  60. Dave Sperandio

    First time following Apple, Fred?

  61. Roy Liu

    Fred, honestly, you’ve got to get off the Apple-bashing bandwagon. You’re way smarter than that. I would argue that Apple is in fact completely clued in to what they are about and what markets they are going after, and the 5c is a direct result of that.Reminds me of my chat with Paul Denninger (founder of Broadview) at a conference in ’08 where he insisted that the iPhone’s “walled garden” approach would doom it to irrelevancy inside of 24 months. As of Sept 17th, according to a Gartner survey, iOS accounted for 55% of all mobile internet activity. This hardly sounds like irrelevance, and it hardly sounds like the description of a “clueless” company. We may dislike Apple’s approach to the market, but I would never call it clueless. It is absolutely by design coming from a deep understanding of both the markets and who they are culturally as a company.

  62. blairh

    Does anybody here want to make the case AGAINST an 8G iPhone 5C that retails for $450 off-contract and free on?I am amazed by the Apple defenders regarding the 5C. Get rid of the 4S and give us an 8 GB 5C at the price I stated. Some people are rushing to defend Apple here but I do think they missed an opportunity no matter what anybody says.

  63. Humberto

    “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.”Well, Fred, how and why do investors (private and public) pay for expensive startups (those that leak millions to no end) where the apparent innovative value is incremental to other startups in the space? (say foursquare, twitter, Facebook)Either its a Ponzi scheme and they’ll dump the loss on the next investor, Or they believe there’s something else about them. Something magical, even if its pure marketing.If there’s people who should understand why people shell out money for expensive iPhones, that’s VCs.:D

  64. Hmph.

    You sound like a really fun guy.

  65. surprised

    surprised to hear the suggestion that Apple of all companies has no idea how people are buying phones. Seems like a bit of a knee jerk reaction or terrible assumption. You are too smart to make a comment like that!

  66. tomwest

    “The reality of much of the world is that people don’t sign two year contracts like we do here in the US.”Wrong.

  67. Matt A. Myers

    My comment didn’t mean to take away from the design constraints of other manufacturers – more that the constraints that Apple was leading with seemed to do well for them. Smart phone wise, I have only ever used an iPhone and a Samsung Galaxy Nexus.