Interested in learning what's next for the gaming industry? Join gaming executives to discuss emerging parts of the industry this October at GamesBeat Summit Next. Learn more.
Poll a few thousand people on the best iPhone ever made, and I’d be willing to bet that the iPhone 5c would have an average ranking in the bottom third or quarter of the list. What was expected to be the “affordable iPhone for everyone” instead turned out to be a slightly cheaper repackaging of last year’s model, without any distinctive features besides colorful shells. Widely considered to be a flop — a point Apple disputed at the time — it didn’t do well enough to inspire either an upgrade or a sequel.
So though Apple could named the iPhone XR the “iPhone Xc,” it didn’t — the new model is both “Cheaper” and more “Colorful” than Apple’s current flagship, but it’s clear that the company isn’t about to repeat the iPhone 5c’s biggest mistakes. As a result, the XR is more likely to succeed than its spiritual predecessor. Here are five specific reasons why.
1. The iPhone 5c was Apple on defense, and XR is Apple on offense
If you think back to 2012 and the iPhone 5 days, Apple was in solid but delicate shape. CEO Steve Jobs had passed away the year before, the iPhone 4s had whimpered its way into the market, and iPhone sales were improving, but not fast enough. As Tim Cook took over as CEO, analysts and critics were haranguing the company to hurry up and release two different but necessary types of iPhones: bigger ones, and cheaper ones.
So at a point when Apple was developing a reputation for catering largely to premium smartphone buyers, the iPhone 5c felt like a defensive move. It seemed like it was almost antagonistically marketed — Jony Ive famously described it as being “unapologetically” plastic — at a price point that was lower, but not much lower than the iPhone 5. Unlike the original plastic iPod shuffle, which had debuted at $99 with a clear mandate to reach every possible MP3 player customer, the iPhone 5c was Apple’s way of opening its doors a little wider, but not too wide.
The iPhone XR is a different beast — a conscious decision to bring some cutting-edge technologies to a lower price point after the iPhone X skimmed the market last year. Apple’s not releasing XR under external pressure, and it’s not acting as if it’s been forced to make even cosmetic compromises this time. But what’s inside the XR is as important as its new wrapper.
2. Apple isn’t just repackaging last year’s technology this time
One of the iPhone 5c’s key mistakes was that it was utterly boring, apart from its redesigned shell. Apple literally took the parts out of the iPhone 5, wrapped them in colorful plastic instead of a metal frame, and called it a day.
The iPhone XR isn’t an iPhone X. It features Apple’s latest processor, the A12 Bionic, and most of the same features found in the iPhone XS — plus a larger (but marginally lower-resolution) screen. Collectively, these components represent conspicuous new engineering and at least a modicum of innovation, which typically help to sell iPhones.
No one will be surprised that it doesn’t have the XS’s second rear camera, few people will mind that it’s missing 3D Touch, and most customers won’t even realize there are other battery and cellular differences. They’re differentiators with the XS, but not showstoppers for the XR’s target markets: iPhone 6/7/8 upgraders and Android switchers.
3. XR is a flagship-caliber phone, inheriting iPhone 6, 7, and 8 customers, not a budget model
Apple’s goal with the iPhone XR isn’t to pull customers away from the iPhone XS; it’s to provide an “affordable” upgrade path from older iPhones and Android devices. The company knew that there was some fraction of its customer base that would gladly shell out $999 or more for a top-of-line iPhone — and a larger fraction that would not. Starting at $749, a $50 premium over the iPhone 8’s launch price, iPhone XR is for the holdouts.
Two years ago, most people would have laughed off paying $999 for a flagship phone, and even Apple didn’t play much in that space: It was risky, without a proven market. By releasing iPhone X and iPhone 8 models simultaneously, it effectively created an “ultra-flagship” tier above its “flagship” models, and used a year to see what the market would do. Since the iPhone 8 and iPhone 8 Plus looked sort of stale, iPhone X sales took off — not enough to outsell iPhone 8 and iPhone 8 Plus combined, but enough to beat either one in many markets.
The iPhone XR provides a simple choice for people who have been on the iPhone 6, 7, and 8 paths for the past few years: Instead of choosing a $699 or $799 phone, here’s a $749 model. Apart from being forced to hold a larger device, and accepting the single rear camera and removal of 3D Touch, it’s going to be better in every way than whatever they’re using. Want something smaller, cheaper, or different — a budget phone? Pick an older iPhone. Back in 2012 and 2013, Apple didn’t have a deep enough iPhone bench to pull that off, but now it does.
4. The new design has already been proven successful, and isn’t risky
Even before yesterday’s announcement, it was obvious that the iPhone XR was going to look like an iPhone X from the front and an iPhone 8 from the back. Rumors set the expectations, then part and CAD leaks confirmed them — for a “new iPhone” model, this is almost as conservative as the iPhone 8. By comparison, that’s nothing like the iPhone 5c, a design Apple anticipated would be polarizing, then accentuated with a range of cheap-looking colors.
The iPhone XR is comparatively classy, largely because it’s made from glass and metal. It expands the successful iPhone 8 (and iPod nano/mini) strategy of using colors to appeal to more users, even if that means adding some wacky ones to attract niche customers. In some ways, this is the anodized aluminum color scheme iPhone users have been waiting years to purchase. So there are good reasons that analysts are expecting over half of all new iPhone sales to be the XR rather than the two XS models, with the ratio growing in 2019.
5. More people are buying iPhones now, though only Apple knows the mix from a huge lineup
There’s one reason Apple can’t really fail with the iPhone XR: scale. When the iPhone 5c debuted in 2013, Apple was selling 150 million iPhones a year. These days, the numbers are annually over 210 million, and will likely be around 220 million this year. Only Apple knows for sure how many units are its latest-generation devices, but its hints and independent analysis both suggest that its new phones — not its cheapest phones — sell the best.
Even if Apple’s iPhone unit sales are only 50 percent larger now than they were in 2013, that’s a lot more people buying iPhones. If only 20 percent of all iPhones sold over the next year are iPhone XR models, that would still be 44 million phones, and it would be hard to call that a flop.
Interestingly, success by today’s measures might look like a flop by the standards of 2013. There are now seven iPhones in Apple’s lineup, leaving each to take a smaller fraction of that 220 million unit pie. Back when Apple was selling 150 million phones, there were only three models: the iPhone 5s, iPhone 5c, and iPhone 4s.
So without knowing exactly how many iPhone 5c units were sold, it’s possible that — as Apple once hinted — the definition of a given model’s success or failure isn’t as clear cut as most people would guess. It would be amusing if the so-far well-received iPhone XR winds up selling fewer units than the iPhone 5c, but it seems unlikely, unless the XR disappears as quickly from the lineup as the iPhone X did.