Tech Biz

iPhone 5C and Moto X: Are These “Budget” Handsets Too Expensive?

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Tech Biz

iPhone 5C and Moto X: Are These “Budget” Handsets Too Expensive?

Both colorful plastic handsets cost more than $500 off contract – far more than predicted.

In the hours following Apple’s incredibly hyped iPhone release event last night, the tech giant’s stock fell by more than 11 points, losing nearly three percent of its value. While some are blaming complex market mechanics for the dip, others have pointed to the iPhone 5C base model’s $550 off-contract cost – a price considered too expensive for a “cheap” phone.

After almost a full year after debuting the iPhone 5, analysts had expected both a high-end iPhone 5S and a budget-friendly iPhone 5C made out of plastic. The iPhone 5C was anticipated to be in the $400-$500 range, to assist Apple in penetrating emerging markets like China and India. Instead, it appears to be a firmly mid-range replacement to the current iPhone 5.

“The iPhone 5C isn't for feature phone users in emerging markets,” said Engadget. “It's also not for the spec hounds who will be buying an iPhone 5S regardless. By and large, it's a marketing tool to get the masses to pay attention to the iPhone name.”

Endgadget continued: “The iPhone 5C, simply put, is for those who've grown numb to Apple's largely evolutionary takes on its primary iPhone range. It'll attract a younger audience that cares less about finely beveled edges and more about playing ‘Connect Four’ on their iPhone case.”

Adding insult to injury, Apple announced that the “budget” iPhone 5C will cost over $700 in China. The company hopes that having a larger presence in emerging markets will provide a much-needed boost to its share price – which has tumbled by almost 30 percent since peaking at $702.10 last year.

The iPhone 5C comes in five colors and sports a 4-inch IPS LCD display with 1136 x 640 pixels at 326 PPI. Power comes from an Apple A6 processor. It also sports the same 8MP camera as the iPhone 5, but with a supposedly larger battery. It launches with iOS 7.

Apple isn’t the first handset maker to disappoint consumers with a “budget” device that ended up being pricey – Motorola’s Moto X ended up costing twice as much as analysts had predicted.

A group of Goldman Sachs analysts had predicted a Nexus 4-like price point of $300 for the customizable Moto X. Instead, the Google-produced smartphone ended up costing between $575 and $600 for a 16GB model without a contract – a hefty sum for a relatively low-spec’d device (that remains carrier-locked to either AT&T or T-Mobile).

Many incorrectly assumed that the Moto X, which is assembled in the U.S., was more expensive than predicted due to increased labor costs. However, the Associated Press reported that the Motorola flagship has a production cost of only $226 – between the iPhone 5 ($207) and Galaxy S4 ($237).

The Moto X offers a staggering 2,000 plus color combinations through its Moto Maker website. It uses Motorola’s own X8 CPU, which clocks in at 1.7GHz. The handset’s 4.7-inch AMOLED screen has a resolution of 1280 x 720 pixels at 316 PPI. A 2200 mAh battery is said to give Moto X 13 hours of usage. It runs Android 4.2.2 out of the box.