Apple launches the 'budget' iPhone

PUBLISHED : Wednesday, 11 September, 2013, 8:45am
UPDATED : Wednesday, 11 September, 2013, 10:39am

Apple on Tuesday unveiled two new iPhones, fielding a slick new top-end model along with one aimed at budget-conscious smartphone shoppers around the world.

“The business has become so large that this year we are going to replace the iPhone 5 and we are going to replace it with two new designs,” Apple chief Tim Cook announced at the company’s Silicon Valley headquarters.

Apple will begin taking orders on Friday, and on September 20 the two devices will go on sale in the United States, Australia, Britain, China, France, Germany, Japan and Singapore.

The iPhone 5C is part of Apple’s bid to counter the flood of low-cost smartphones from rivals, most of which use the Google Android operating system.

Apple designer Jony Ive said that despite the low cost, the polycarbonate iPhone 5C with a steel frame “is beautiful.”

“We took the same fanatical care with how the iPhone 5C feels in your hand,” Ive said.

The iPhone 5C with 16 gigabytes of memory will sell for as low as US$99 with a US carrier contract -- half the cost of earlier iPhone base models.

Analysts were keenly focused on the promise of an iPhone 5C to win over buyers in China and other developing markets.

“The 5C (is) a no-compromise device,” Gartner analyst Van Baker said after trying out Apple’s new phones. “It is just in a plastic case instead of a metal case, and they basically reduce the price by the cost of materials.”

Baker estimated the price cut allowed by lower-cost materials at around US$100. He noted that the “open question” was whether iPhone 5C would be priced attractively for emerging markets at what could turn out to be a US$550 price tag without subsidies from telecom service providers.

The top-line iPhone 5S, which starts at US$199 with a contract for US buyers, “is the most forward thinking phone we have ever created,” said Apple vice president Phil Schiller.

“It is the gold standard in smartphones.”

Schiller said the 5S model includes a speedier chip which brings up the computing power from 32 to 64 bits.

“It has over a billion transistors in it,” he said, adding that the device will be “about twice as fast in graphics and computing power and about 40 times faster than the original iPhone.”

The 5S will also have improved battery life, with some 10 hours of talk time, or 40 hours of music listening, Schiller added.

Apple introduced a fingerprint sensor for the iPhone 5S, as a new security measure in place of passwords.“You can just press the home button to unlock your phone,” Schiller said. “You can use it to authenticate iTunes purchases.”

Schiller added: “We have so much of our personal data on these devices, and they are with us almost everyplace we go, so we have to protect them.”

Reticle Research principle analyst Ross Rubin described Touch ID as a “show stealer” that addresses “a necessary annoyance that many consumers have to deal with many times a day.”

Apple also broadened its colour palette, announcing the low-cost phone in blue, white, pink, yellow and green, and the top-line model in silver, gold and a new “space gray.”

Apple said its iOS 7 software will debut September 18. It includes a free iTunes Radio Service featuring more than 200 stations “and an incredible catalogue of music from the iTunes Store,” Apple announced earlier this year.

The two new handsets keep the four-inch screen of current iPhones, despite some speculation Apple would boost the size to compete with larger phones from rivals like Samsung.

The smartphone market is now dominated by Android devices, with roughly three-fourths of all handsets, but a forecast by research firm IDC suggested Apple will increase its share this year to 17.9 per cent from 16.9 per cent.

IDC analyst Ramon Llamas said that by introducing a lower-priced handset, “Apple is staking out its space in the lower-cost smartphone category.”

Llamas said Apple is seeking to fend off challenges from lower-priced devices while “it enjoys bigger profit margins and still maintains the aura of being an aspirational brand.”

The event was a disappointment to some who were looking for a fresh device from Apple, such as a smartwatch or TV service.

I think there was an expectation for that ‘one more thing. People were looking for some pizzazz and they didn’t get it

“I think there was an expectation for that ‘one more thing,’” said Roger Kay at Endpoint Technologies. “People were looking for some pizzazz and they didn’t get it.”

Apple announced separately a deal with Japan’s biggest mobile phone carrier NTT DoCoMo to bring the two new iPhones to that country.

“We’ve enjoyed tremendous success with iPhone in Japan, in fact it’s the top selling smartphone in the country, and we look forward to delivering iPhone into even more customers’ hands through NTT DoCoMo,” Cook said.

Here are the highlights of Tuesday’s event at Apple’s Cupertino, Calif., headquarters.


Apple is discontinuing the iPhone 5 released last fall. It’s being replaced with the cheaper iPhone 5C and the high-end iPhone 5S.

The iPhone 5C has many of the attributes found in the iPhone 5. It has a screen measuring 4 inches (10.16 centimeters) diagonally and sports an 8 megapixel camera. The new phone, however, is largely made of plastic and doesn’t have the aluminium side and glass back found in the iPhone 5. The 5C also is more colourful. It comes in a choice of green, blue, yellow, pink or white, rather than the traditional black or white.

The iPhone 5S has an identical screen, and its camera is also 8 megapixels. But each pixel is larger. That means it’s better at capturing light, which should translate into better photos indoors and other low-light settings. The new camera also has a dual flash, which Apple calls True Tone. The flash fires two bursts of lights at once, each slightly different in colour. The iPhone will adjust the combination of the two automatically to bring out more natural skin tones and other colours in images.

The 5S also has a faster, 64-bit processor, which lets it handle more data simultaneously compared with traditional 32-bit systems.

Also available with the 5S: a fingerprint-recognition system that lets you easily unlock phones without having to type in a four-digit code. Apple says many people don’t use a passcode because it is cumbersome. With fingerprints, Apple says, the iPhone can offer security more easily.

Prices for the iPhone 5S will be similar to that of previous models: US$199 for 16 gigabytes of memory, US$299 for 32 gigabytes and US$399 for 64 gigabytes, all with a two-year service agreement required. It will come in silver, gold and gray. The iPhone 5C will cost US$99 for 16 gigabytes and US$199 for 32 gigabytes.

Advance orders for the 5C only start Friday. Both versions will be available a week later, on September 20, in the US, Australia, Canada, China, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore and UK. This is the first time a new iPhone has been available right away in China, one of the world’s fastest-growing markets.

Although Apple is discontinuing the iPhone 5, it will still offer the model before that, the iPhone 4S. The 4S will now be free with a two-year agreement.


The new phones will come with iOS 7, the next version of Apple’s operating system for iPhones, iPads and iPod Touches.

The biggest change comes in the new system’s design: Instead of app icons that try to mimic real-world counterparts, Apple is favouring simplicity and consistency from app to app. The new 5C phones were designed to complement the colour scheme found in the new operating system.

As previously announced, you’ll be able to swipe up from the bottom of the screen to access a control centre, for such functions as turning on airplane mode and adjusting brightness. It’s similar to a feature available on rival devices running Android.

The calendar has been cleaned up and looks more streamlined. You can also get to your contacts list quickly while reading messages by swiping from the left of the screen. A featured called AirDrop will let people share content with other Apple devices.

There’s also better organisation of photos you take on iPhones. Instead of the endless streams of the past, pictures will be organised into moments — such as “home” or “trip to San Francisco.”

The Siri virtual assistant is getting refreshed, too. You’ll be able to choose a male voice, not just a female one as is currently the case.

In addition, the iOS 7 system includes Apple’s new streaming music service, iTunes Radio. The service will personalize listeners’ music based on what they’ve listened to and what they’ve purchased on iTunes. If you like a song, you can buy it through iTunes with one click.

Owners of older iPhones can get the iOS update for free starting next Wednesday. Just respond to the prompt when it comes or go to “Software Update” in the settings under “General.” Apple said iOS 7 will be available to download and install on the iPhone 4 and later, the iPad 2 and later, the iPad Mini and the fifth-generation iPod Touch, the one released last year.


Apple will make its iWork package of apps — Pages for word processing, Numbers for spreadsheets and Keynote for presentations — available on iPhones and iPads for free. The apps were US$10 each. Apple is also making the iPhoto and iMovie apps available. Those were US$5 each. The company says the creativity software complements the iWork package for productivity.

The offer is available to buyers of new iPhones, iPads and iPod Touches, retroactive to September 1. The device must be compatible with iOS 7 to qualify. Once a new device is purchased, the app can be downloaded for free to other devices on the same account, as long as the device is upgraded to iOS 7.

Apple did not announce an update to a Web-based version of iWork. It’s currently available in a beta test mode. Apple announced the Web-based version during a presentation in June, saying that iWork for iCloud will be available this fall. Apple hasn’t provided details on pricing.

Agence France-Presse, Associated Press