Another post on iPhone 5C, Apple's lower cost iPhone

We look at an entry level iPhone as a way to acquire new customers Apple finds valuable. I make this point specifically because I don’t believe a customer who just wants a “cheap” product is the kind of customer Apple wants or one that adds any value to a computing ecosystem... The fallacy those who think price is all that matters fall into is believing that all consumers value the same thing.
— Ben Bajarin, Techpinions

Three very important points on iPhone 5C are very well discussed in this article. The first one being on customer acquisition. There is a reason why people once in the Apple's ecosystem do not move out of it for a while. The user experience and the satisfaction you get from Apple products are unparalleled. Once you are inside the Apple ecosystem (doesn't matter how you entered it, be it buying an expensive Macbook Pro or an iPod), the halo effect takes care of the rest. You start investing in music and Apps and eventually more Apple products. Ben Bajarin makes this point very clearly, that as much as it is important for Apple to increase the market share with iPhone 5C, it is important for Apple to expose more customers out there to the Apple ecosystem and to hold on to them once they are in it.

We must first back up and ask whether all engagement is equal? The other challenge with using the engagement statistics most promote publicly is that they all exclude important metrics. For example we don’t know how much extra time iPhone (or iOS) consumers spend on the device browsing the App store or shopping for music.
— Ben Bajarin, Techpinions

The second point is loosely based on another interesting article by Benedict Evans on how Android market share is exponentially increasing over Apple's and eventually Android is going to be a more attractive option for the developers than Apple. While the numbers make sense in this article, like Ben Bajarin points out, though the number of people buying into Android is increasing (thanks to cheap Android phones and an exploding smartphone market in the developing countries), people who are buying these cheap Android phones are still using them as 'dumbphones' as usage statistics have repeatedly shown that iOS web usage is at least 3-4 times more than that of Android's, even though the market share numbers are exactly opposite.

Mobile OS web usage - Source: Marketshare.com

Mobile OS web usage - Source: Marketshare.com

Also multiple reports have shown that iOS users spend more on Apps than Android users and that the revenue for developers from iOS is significantly more (more than twice) than from Android. So this is clearly an anomaly and Apple should care about the 'lesser' number of people who are willing to do more with their smartphones, like browsing more, buying Apps and music from Apps store and the iTunes store, etc., than people who are just going to buy a smartphone and do nothing 'smart' with it!

iOS App Store vs. Google Play App Downloads - Source - AppAnnie.com  

iOS App Store vs. Google Play App Downloads - Source - AppAnnie.com

 

As much as Apple will benefit from getting new customers with an entry level iPhone that benefits their ecosystem so will Google. We know Google makes more on iOS than Android and interestingly an entry level iPhone will likely help Google’s bottom line as well.
— Ben Bajarin, Techpinions

It has been widely reported that Google earns significantly more (almost four times!) from iOS than from its own Android devices. Hence the above point is more than valid and it will boil down to the relationship between Apple and Google in the post Steve Job's 'thermonuclear war' era. Clearly these two companies will do much better working with each other than against!

iOS devices were worth more than four times as much to Google than Android devices since the launch of Android in 2008.
— Digital Trends