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Switched On: The why of the 'i' buy


Each week Ross Rubin contributes Switched On, a column about consumer technology.

For the past few years, the media has met iPhone introductions with skepticism that precedes great sales success. This has become such a cliché that the superstitious might worry what would happen should new iPhones be introduced to universal praise. But there was no cause for worry as far as the iPhone 5c and 5s were concerned. In the weekend following their initial availability, Apple reported that it sold 9 million iPhones, which set a new record for the company.

A few of the reasons behind this success likely had less to do with the strength of the product per se. The new iPhones were launched in 11 countries as opposed to nine in the previous launch. The fast-growing market of China was one of those. It was also the first launch to include Japan's NTT DoCoMo. And back in the U.S. this marked the first time that new iPhones had been launched on all four major US carriers -- a significant shift from the product's first years as an AT&T exclusive. In fact, T-Mobile, the newest carrier to participate in an iPhone debut, has been particularly aggressive about promoting its Jump service that encourages upgrades, and its competitors have introduced their own upgrade-facilitation programs that grease the upgrade wheels for Apple and others.

Outside of T-Mobile, there is a larger base of in-contract iPhone users ready to upgrade; in what can be called the momentum effect. These include many relative newcomers to the platform from Sprint. But even at AT&T and Verizon, there are more iPhone 4 and 4s users skipping a generation to upgrade to the iPhone 5s than there were iPhone 3G and 3GS users looking to skip a generation and upgrade to the iPhone 5. With the strongest and deepest assortment of apps and users who invest the most in them, Apple has the highest switching cost to another platform.

The iPhone 5c and 5s hold different appeals and, with more dramatic product line segmentation than we've seen in the past...

That said, the iPhone 5c and 5s hold different appeals and, with more dramatic product line segmentation than we've seen in the past, hold different value to Apple. The colors of the 5c reflect an oft-requested feature of the iPhone line, one that the company used throughout its flash-based iPod assortment and even the early CRT-based polycarbonate iMacs of the late 1990s.

Jaded geeks may call the colors a sign of a maturing product line and scoff that personalization has been available via an endless array of iPhone cases in the past. However, particularly for newcomers to the platform, it adds a dimension that hasn't been available in the platform before. Indeed, the appeal of different colors in a phone goes back at least to Nokia's 6100 feature phones. However, as smartphone penetration has grown in the US, it's a way to differentiate that has been used in Nokia's Lumias, HTC's One and, to an extreme, in the Moto X.

Still, while the iPhone 5c may be little more than an iPhone 5 in new, brighter clothing, most of those upgraders accustomed to a $200 price for a flagship will be attracted to the iPhone 5s. The next Switched On will address how the components of that handset combine to create something old iPhone hands will appreciate, as well as a few areas where competitors are leading the way.

Ross Rubin is principal analyst at Reticle Research, a research and advisory firm focusing on consumer technology adoption. He shares commentary at Techspressive and on Twitter at @rossrubin.

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