Apple AAPL +2.82% is in the middle of a big marketing push for its new budget phone, the iPhone 5c. San Francisco is plastered in billboards that put the new colored plastic casing on full display, with solid green, blue pink and yellow backgrounds showcasing the big aesthetic shift that sets this new line apart. “For the Colorful,” they read.
In the past, the company accomplished this by just offering the older iPhones at a reduced price, but now it wants to get out in front of that strategy and keep people buying new iPhones. I can’t help but wonder if one of the main purposes of this phone is not just that it’s cheap (actually, it isn’t very cheap) but that it’s cheaper than the iPhone 5s. By its mere existence, it codifies the identity of the main iPhone brand. The rest of the smartphone world cannot always be counted on to remind us that the iPhone 5s is a beautiful and expensive product geared towards high-end consumers, so Apple is doing that itself.
It isn’t that the iPhone 5c isn’t also an Apple product, and a successful one at that. As Tim Worstall and others have pointed out, rumors about the embarrassing failure of the 5c have been greatly exaggerated. But this is a vital ancillary benefit. In its attempt to segment the market and capture a slightly more cost conscious consumer, Apple actually reinforces the luxury brand it already has. Looking at the big, colorful ads for the plastic iPhone 5c, I couldn’t help but picture the iPhone 5s. Sure, the iPhone 5c is colorful, fun and cheap(er), but the main line just looks more special than ever in comparison.
Consider then, Apple’s first iPhone 5s TV spot. It’s a clear nod to the idea of the main iPhone line as an expensive, decadent product to stand in contrast to the 5c:
It’s no coincidence that this is when the company decided to unveil a gold case.
For a certain kind of consumer, iPhone 5c marketing does little more than remind them of how much they like their current iPhones, and how they wouldn’t dream of downgrading to something with a plastic case. It’s not all consumers, but the image-conscious are probably Apple’s most important demographic. People have worried that a cheaper iPhone would ultimately damage Apple’s brand, but I think that in a strange way, it actually reinforces it while picking up larger market share at the same time.