Market Overview

iPhone 5S Sales To Rise, iPhone 5C Sales To Plummet

Apple (NASDAQ: AAPL) will continue to enjoy healthy iPhone 5S sales in the fourth quarter, but the iPhone 5C is expected to decline.

According to market intelligence firm TrendForce, Apple will ship around 46 million smartphones in the December quarter. The iPhone 5S is projected to account for roughly 70 percent of those units (versus 30 percent during the September quarter). The iPhone 5C, on the other hand, is expected to account for 24 percent of total units shipped -- down from roughly 30 percent during the previous quarter.

The economics here are rather simple. TrendForce's research has found that while the iPhone 5C is much less popular than analysts expected, the iPhone 5S has exceeded expectations. Price and features are the primary culprits.

The iPhone 5C turned out to be an expensive, plastic-encased version of last year's iPhone 5. The iPhone 5S, on the other hand, contained all of the bells and whistles that bloggers anticipated (such as a fingerprint scanner), as well as a feature no one saw coming: a 64-bit processor.

Some critics have dismissed Apple's 64-bit processor, arguing that it does not offer any significant benefits. Others have defended its value, insisting that it is a welcome and logical step forward.

Related: Apple's iPhone 6 Could Have Curved, Pressure-Sensitive Display

At least one analyst, Trip Chowdhry, thinks that the 64-bit processor delivers an order of magnitude difference over other processors.

Thus, when consumers purchase the iPhone 5S, they may be getting more than a voice recognition app (the primary feature that sold the iPhone 4S) or a flawed Maps app (the feature Apple initially hoped would sell the iPhone 5).

With the iPhone 5C, the gains are much less obvious. Why should consumers spend $549 -- the price Apple would have charged for the iPhone 5 if it were still available -- for a plastic iPhone? Aside from the fact that it is slightly cheaper than the iPhone 5S (and less invasive for those who don't want a fingerprint scanner), the iPhone 5C does not offer any benefits over the other iPhones available.

Apple has continued to sell the iPhone 4S, but TrendForce does not expect it to sell a notable amount of units in the December quarter. In fact, its researchers think the iPhone 5 -- which has now been discontinued -- may actually sell a greater number of units.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Apple iPhone iPhone 4 iPhone 4S iPhone 5 iPhone 5C iPhone 5S TrendForce Trip ChowdhryNews Rumors Tech Best of Benzinga

 

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