if people get their first smartphone because it is $100 instead of $200
I.e. people are more likely to get an iPhone 5C because it's cheaper and thus "only" $99 more than the free phone they'd get otherwise. But this is not specific to the 5C, since the same scenario was in place as soon as Apple started offering two kinds of iPhones at the same time.
I wasn't very clear, but that was my point, that the marketing angle seems to be that it is an option for more budget-conscious first-time smartphone buyers. And yet, there are negligible actual savings compared to the 5s, since the major part of switching to smartphone is the cost of a two-year service agreement.
The marketing angle is not cynical on the scale of, say, BlueHippo[1][2], or pay day loans, but it is different for Apple to be creating bad value proposition that will have to be dismissed as the customers' fault for not doing their research.
And sure, it actually is customers' fault, but I don't think Apple customers have had to watch out for being tricked by Apple as much in the past.
While, it is simple to say: you can use this phone for two years for $2500, or this phone for two years for $2400, and it will be obvious that you'd only choose the plastic one with half as powerful a CPU if you really like the colors, I don't think salespeople will be saying this in stores to potential customers.
The idea of a "budget" iPhone that looks like it starts at half the price, but actually only represents a 4% discount on the TCO, just seems like a departure from their past, and towards becoming a slimier company. (again, unless you just really like the colors)
Are they playing this up any more than they played up the "$100" 4S last year, or the "$100" 4 the year before, or the "$100" 3GS before that? Maybe they are and I missed it. I will admit that I zoned out on much of the "marketing" parts of the 5C presentation.
I will agree with the general premise that smartphone pricing in the US is fairly deceptive, with huge emphasis given to the up-front price of ~$200, and almost no attention paid at all to the whole-contract cost of ~$2,500. This is certainly intentional and intentionally deceptive. But, alas, it's not new, not even for Apple.
I think you're right, and that I just haven't been paying attention. I've seen headlines talking about a cheaper iPhone coming, and was surprised that the opaque costs are essentially the same.
The industry seems ripe for disruption from someone, whether it's someone like T-Mobile or Apple/Google/Facebook buying itself a network and advertising in terms of the annual cost of ownership, perhaps even bundling the service with the device, like Amazon's Whispernet on a larger scale.
T-Mobile seems to be trying. They're fairly heavily advertising cheap bring-your-own-phone plans, particularly targeted at getting people to switch their smartphones from other carriers. People do care about their monthly cost, they just don't seem to weight it properly. Targeting people who already have a phone seems like a good move in that respect, because a lot of people wouldn't spend $400 up front to save $30/month, but they're often happy to save $30/month by switching carriers even though it means they don't get a phone upgrade.
The biggest problem for me with what T-Mobile is doing is simply that their network coverage is not that great. Seems like it's kind of inherent when it comes to attempting to disrupt the industry: the smaller players will necessarily be those with the worst networks, and the large players with good networks have no incentive to make any changes.
I think he means from a feature-phone plan to a smartphone plan.