Apple has admitted that it badly misjudged demand for its polycarbonate plastic iPhone 5Chandsets, as its share price plunged nearly 10 per cent despite impressive earnings for the quarter.
When Apple was rumoured to be planning a low-cost iPhone, designed as competition to the wide range of budget-friendly Android handsets available from its rivals, there was considerable interest. Sadly, when Apple launched the iPhone 5C alongside its flagship iPhone 5S it became clear that 'low-cost' wasn't the company's goal: despite a cheaper polycarbonate body and last-generation internals, the handset cost nearly as much as its far better equipped sibling - and lacked the headline-grabbing TouchID fingerprint scanning security system.
Shortly after launch, Apple began to struggle for stock of the popular iPhone 5S while suffering from a surplus of iPhone 5C handsets. Now, Apple chief executive Tim Cook has confirmed that it badly misjudged how the colourful iPhone 5C would sell. "It was the first time we ever ran that play," Cook told analysts during the company's latest earnings call, referring to launching two devices at different price points simultaneously. "Demand percentage turned out to be different than we thought."
The result of the admission on investors was nothing short of electrifying: despite announcing overall revenue of $57.6 billion for its last quarter - up from $54.5 billion a year ago - and a record of 51 million iPhone handsets sold over the three-month period, the company's share price dropped by over eight per cent in after hours trading - wiping $40 billion from the company's market cap value.
Apple, however, is determined to fight back, with Cook promising 'innovative' new products for the coming year - hinting at the long-rumoured iWatch.
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