Blog Post

Color me shocked: Best Buy halves iPhone 5c contract price after just two weeks

Good news if you didn’t buy that iPhone 5c just yet: Best Buy(s bbuy) is selling Apple’s colorful smartphone for $50 with contract from October 3 through October 7 reports ABC News. That’s a sizable discount from the $99 with contract price tag directly from Apple. And unlike prior iPhones, it’s the fastest discount yet: The handset debuted just two weeks ago. So why the price cut from a large reseller?

iPhone5c_Backs cases

The 9 million first weekend sales for the new iPhone 5c and 5s were a record for Apple, but the company didn’t break that figure down between the two models. Data from web traffic and other online analytics suggest however that the new iPhone 5s accounted for 3.4 more times the sales of the iPhone 5c. That works out to around 6.95 million units of the iPhone 5s compared to 2.05 million iPhone 5c handsets.

If the sales trend is correct, it could explain the quick discount: A lower price can obviously move more iPhone 5c handsets.

What’s interesting about this situation is that this is the first time Apple re-purposed a prior year’s iPhone model and placed such a focus on the device. The new iPhone 5c is essentially last year’s iPhone 5 on the inside, along with a color choice in plastic on the outside. The old iPhone 5 is discontinued; another first for Apple.

It seems that the “old is new” strategy isn’t working quite yet based on the anecdotal data and quick discounts. Best Buy isn’t the only retailer selling the iPhone 5c for less than what it costs at the Apple Store. Both Walmart(s wmrt) and Target(s tgt) sell the handset at a $79.99 starting price; $20 less than what you’ll find in Apple’s retail locations or online.

Meanwhile, demand is still very high for Apple’s truly new phone, the iPhone 5s. The devices are hard to find in any color or capacity, leading some developers to create online tools to check retail inventory. It looks like a dash of color on last year’s model isn’t enough to boost demand; more people want the latest and greatest from Apple.

24 Responses to “Color me shocked: Best Buy halves iPhone 5c contract price after just two weeks”

  1. No surprise, no loss.

    The plan was obviously always to allow retailers to compete with the pricing of Android headsets, making on-contract prices attractive again compared to buying the iPhone 5c prepaid. The savings Apple made on plastic casing would preserve it’s margins without letting retailers exceed negotiated intervals, and the variability is not a sign of decrease in demand but instead increased competition between retailers looking to get the business of iPhone users.

  2. I’m not at all surprised that people are preferring to buy the 5s over the 5c.

    If you are that anxious to get the latest and greatest from Apple, why wouldn’t you pay the extra $100 to get the 5s?
    If you don’t really want the more powerful CPU or extra features, why not just get by with an ‘old’ 4 or 4s?

  3. I don’t have the budget for either phone, but if I did, the 5s would win hands down. The 5s is twice the phone of the 5c. Iif you run the numbers over a two-year contract, even with this recent 5c price cut, the difference between the two comes to only pocket change per day.

    With these “Hello Kitty” colors, I suspect the main customers for the 5c will be teen girls in Japan. Guys don’t go for pastels. Guys like power, power, power and that the 5s has in abundance.

  4. Jonathan Polley

    I’m sorry, but you can’t think of any other reason why someone might do this? Although I am not an expert on the topic, I would guess that this is where companies like Radio Shack, Best Buy, Walmart and others believes that they can bring in more customers. If they were having sales issues then they can return the phones like they do with all other unsold inventory.

  5. So people thought prior to release that c would mean cheap. Then it wasn’t and people were like “whu?” Now its cheap and people are like “whu?” Make up your stupid minds!

  6. Tim Gillespie

    Ummm. Appleinsider just posted numbers that the iPhone 5c was 2nd best selling phone at ATT / Sprint and 3rd best seller at Verizon and t-moble of the 4 largest carriers. This is per Canaccord’s sales data.

    So u think your theory it’s not selling well is a little off. LOL

    Likely this is a more related to us going into holiday sales month pre-Black Friday. I used to work at BBY and they would always work up to that.

    • New phones outselling phones from 4-6 months ago doesn’t surprise, but I hear you.

      When you worked at Best Buy how soon after launch of an iPhone was the device first discounted? And were the gift cards immediately applicable to the new phone purchase? Thanks!

      • slacker711

        I think it is worth noting that if you look at Best Buy’s inventory that various models of the 5C have been going in and out of stock since launch. If you want a pink, yellow, or green model, there is a decent chance that your local store is out of stock.

        Considering that, it is hard to see how this move by Best Buy means slow sales.

  7. Kevin Robinette

    You are attempting to sway my issue with your piece. You leave out important information to validate your assumption. Yes someone can purchase the phone for $50. You can also take a iPhone 4S into Apple and purchase the phone for $0 or close to it. Does that mean the phone is not selling well? NO! You can’t logically make that assumption.

    Best Buy periodically does this. It’s to get customers to come and purchase phones from them so they will purchase other stuff too. It is not a reflection on the iPhone 5C not selling well. The iPhone 5C was not made to be a top selling phone. It’s more of a long term solution for a segment of the market that doesn’t want 5S.

    To sum up yes someone can go to best buy and purchase the iPhone 5C for $50 after using a gift card. This weekend only. If they were emptying inventories the phone would be $50 from here on out.

  8. Kevin Robinette

    Actually Best Buy is offering a $50 gift card. That’s not the same as selling the phone for $50. It’s an incentive to get the customers to come to their store and buy so they can buy other stuff while they are there. It’s marketing. Nothing more

  9. Darren Cross

    one merchant is not a trend. isn’t it possible that the motives here might be purely Best Buy’s and this says nothing about the 5c specifically?

    nice editorial piece

      • Is that a trend or a plan? This article is just nonsense and conjecture. The mid-tier has always had discounts from list price even in previous years. This is absolutely nothing new.

        Best Buy? They are desperate to get people in the doors so taking a steep discount on iPhone 5c seems like a reasonable tactic and is unrelated to how the 5c is selling.

        What a terrible article.

  10. The 5C is strange. It sounds like a real screw-up.

    The plan was probably to make a ton for China Mobile, but they didn’t get costs down, missed China Mobile’s price target and wound up with millions left to sell in the US and elsewhere.

    It will be interesting to see what happens to gross margins in the next quarterly report.

  11. Rann Xeroxx

    “The new iPhone 5s is essentially last year’s iPhone 5 on the inside, along with a color choice in plastic on the outside.”

    Correction: You mean the 5c.

    Not a surprise as this phone looks like a cheap version of an iPhone. It would have been interesting if Apple would have cont. to sell the 5 and then compare how many people would buy that discounted phone over the 5c. I think the build quality is very important to Apple fans.