Fred Wilson: The C In 5C Means Clueless Not Cheap

Fred Wilson, Apple, iPhone 5S, iPhone 5c

The godfather of New York venture capitalists Fred Wilson took to his blog Wednesdaywith his reactions to the New York City Mayoral race and, the all important news to the world, Apple’s release of two iPhones.  When the story started crossing my alert box, I hadn’t had time to read the blog post and thought perhaps Wilson had gotten it wrong. I was thinking he didn’t see the need for the iPhone 5C.

Wilson took a look at what really happened on the stage at Apple’s headquarters in Cupertino, California on Tuesday morning. The first indicator that things were awry with this iPhone announcement is that they were holding the press event in the town hall room at Apple vs the Moscone or the Yerba Buena Center For The Arts. The significance in the venue is how many people it holds. Holding the event on campus meant a tighter, more curated press corps.

So what did happen on Tuesday?

Apple’s Phil Schiller, Jony Ive, and CEO Tim Cook announced not one but two new iPhone models. The iPhone 5s is the annual upgrade to the original iPhone (now in it’s 6th iteration). The iPhone 5c is supposed to be a cheaper version of the iPhone, designed to start competing with Android.

Most tech pundits have said time and time again over the last three days that one would be silly to “upgrade” your current iPhone to the iPhone 5c. The colors are cool but you can get a case for the new iPhone 5s in any color imaginable. Heck a 3d printer can print you one.

The 5C isn’t supposed to be an upgrade. It’s supposed to be an entry level iPhone, which is Wilson’s exact point over on his blog. When Apple held their press event, they showed the subsidized two year contract prices. The iPhone 5c would start at $99 while the 5s would start at $199. Yes you get a whole lot more for $100 dollars, but that’s not the point.

The point Wilson brings to our attention is that the iPhone 5C is supposed to be the low cost point of entry in the iPhone ecosystem. Abroad most wireless users buy a phone outright and just pay for SIM cards from the carrier they want. They own the phone and don’t have to get into a ridiculously long contract to obtain it. In the US those contracts are two years and in Canada they are three years.

So if you look at what’s really happening as Wilson reports: “the 5C is a big disappointment. It will sell for $100 less than the 5S in the unsubsized market, which means $549 for 16gb and $649 for 32gb. The C in 5C does not mean “cheap” as I had hoped. It means clueless, as in clueless about how the vast majority of new smartphone users are paying for their phones.”

So it looks like Wilson is right. The 5C may not be that entry point Apple’s been looking for to disrupt the low cost Android phones that are gobbling up market share.

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Apple Leaves Finger Print Scanner, TouchID Untouchable To Developer’s And Startups

Apple, iPhone 5S, TouchID, developers, startups, mobile wallet

(photo theverge.com)

Apple’s CEO Tim Cook, alongside executives Jony Ive and Phil Schiller, took to the stage today at their Cupertino headquarters to unveil the new iPhone 5c and the iPhone 5s. If you’re a frequent reader of technology blogs, you’ll notice that most of the leaked specs actually came to fruition.

Normally when we are building up to an Apple product release there are several “features” that may seem a little outlandish. Often times they don’t actually pan out. In fact there were 127 rumors of Apple changing phone sizes over the years. Only one time were they actually correct.

One of those rumors this year was a “finger print scanner” that would somehow be baked into the new iPhone. Many pundits said no-way was Apple going to put a finger print scanner on their phone. Well they have. Which actually makes a whole lot of sense after seeing leaked photos of a new home button.

As you can see from TheVerge’s photo above the home button now dubs as a fingerprint scanner. When talking about it on stage, Apple execs said that it provides a new layer of security for those who feel a 4 digit code is too “cumbersome”. Of course a finger print scanner also provides an extra layer of security for people who typically use easy to guess four digit codes.

The finger print scanner, dubbed “touch ID,” can work with multiple finger prints, and with any kind of human finger print it takes into account arches, loops, and whorls. CSI Las Vegas fans, you know  what I’m talking about.

In this generation of the iPhone, the TouchID is seen strictly as a security layer for the walled garden within your iPhone. Apple did say you will be able to use your finger print to authorize purchases from the iTunes store. They didn’t say whether you would be able to use it to validate in store purchases with the Apple store app, but that is very possible.

What Schiller was very specific about, though, was that the TouchID information would not be available to other software. Period.  It’s never uploaded to Apple’s servers or backed up to iCloud. The Verge’s Dieter Bohn reported in their live blog.

What is possible is that Apple’s Passbook and future apps designed around security and purchasing will most likely benefit from access to the TouchID, but for now startups hoping to disrupt the mobile wallet with a tie-in to Apple’s Touch ID will find it, well, untouchable.

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