Apple enjoyed a record-breaking weekend by selling more than 9 million of its new iPhone 5S and 5C smartphones, but the best verdict on the company's product strategy will come in a few weeks with more detailed reports about how well the 5C sold overseas, analysts say.
In a press release on Monday, Apple CEO Tim Cook thanked fans of the iPhone for rushing out to buy the new smartphones following their launch on Sept. 20, which nearly doubled from the five million iPhone 5 devices sold during a product launch weekend last year. Combined sales of the 5S and the 5C also zoomed past sales of the four million iPhone 4S devices sold during the launch weekend of that phone in 2011.
"The demand for the new iPhones has been incredible, and while we've sold out of our initial supply of iPhone 5s, stores continue to receive new iPhone shipments regularly," Cook said. "We appreciate everyone's patience and are working hard to build enough new iPhones for everyone."
The real question is how those sales numbers divide between the more advanced 5S and the more budget friendly 5C, says Ramon Llamas, research manager for the mobile phones team at the International Data Corporation (IDC) analyst firm. Analyst firm Localytics estimated that the 5S outsold the 5C by three-and a half to one.
Apple could not be reached for comment.
Llamas says the success of the 5C will help reflect whether Apple is able to branch out into new markets with more affordable phones. There should be reports on how well the 5C sold around the end of October, he added. The market share of the iPhone has remained relatively unchanged since 2011, which is a sign of continued strength for Apple products, but is also a sign that the company needs to branch out into new segments of the market to continue growing, he says.
"The iPhone can be very cost-prohibitive in overseas markets," because the iPhones sometimes are not available with a wireless contract price, Llamas said. Without a wireless contract the iPhone 5S costs $649, and the 5C costs $549.
"If the 5C sells well overseas that will be a very good indicator for Apple," Llamas says.
The market expected "a much less expensive smartphone," from Apple, but the company has a history of "playing at the high end of the market," says Van Baker, the lead Apple analyst at technology research firm Gartner. Selling a small number of cutting-edge products is a "high risk, high reward" business model, and to maintain it Apple needs to keep innovating and needs to release new types of products very soon, Baker says.
"If a year from now they have not brought out new product categories, the tech community has a legitimate case to get nervous about Apple. But I would be surprised if that happens," Baker says.
Apple is reportedly developing an iWatch to compete with Google Glass in the wearable technology market, according to Bloomberg. If that is true then it is exactly the sort of innovation that needs to happen for Apple to expand its user base, Baker says.
The time gap allowing for innovation and development between 2001, when Apple launched the iPod, and 2007, when the company launched the iPhone, indicates to Baker that the company still has time to develop "products that you didn't know you needed." However, the consumer tech market has grown more competitive, placing increased pressure on Apple, Baker says.
"You can fit the entire Apple product line on a coffee table. Most companies their size have a couple of hundred products," Baker says.
The iPhone 5C is still a step up from the iPhone 5, Baker says, with improvements such as a better camera, even though it is not as advanced as the iPhone 5S, which has upgrades including a fingerprint scanner.
"It's not a compromise device since the iPhone 5c is everything that the iPhone 5 was," Baker says. "People like to buy new devices rather than devices that have been on the market for a while."