Gene Munster

Apple's slow-selling iPhone 5C gets a trim at the halfway mark

March 18, 2014: 6:28 AM ET

A new price point would explain the pre-Spring burgeoning of iPhone 5C billboards and ads.

Data: Umeng

Data: Umeng

Hollywood billboard

Hollywood billboard

FORTUNE -- It takes stubborn company to resist the pressure Apple (AAPL) has been under for the last six months to lower the price of the iPhone 5C -- the one Wall Street expected to be C for "cheap" or "China" but which turned out to be neither. The day the price was announced, analysts across the board expressed their shock and disappointment, and traders knocked $40 billion off the company's market capitalization.

"This chart shows the iPhone 5C has bombed in China," read the headline that TechAsia ran last week above the attached chart. Even Tim Cook, Apple's CEO, admitted in January that he had misjudged demand.

"The fact is, Apple doesn't know what demand for the iPhone 5C will be in developing markets," Piper Jaffray's Gene Munster told me the day the iPhone 5C was unveiled -- right after he'd been briefed by Apple execs. Rather than give away more margin than necessary, he said, the company decided to start high and make adjustments later.

Six months later -- nearly to the day -- Apple has started making those adjustments. On its U.K. website, where an unsubsidized 16GB iPhone 5C goes for £469 ($779), a new 8GB model showed up Tuesday morning at a new price point: £429, or £40 ($67) cheaper.

As of 6 a.m. ET, the 8GB model hadn't popped up on Apple's U.S. website, where the 16GB iPhone 5C sells for $549 unsubsidized and $99 with a two-year contract. We might have a few hours to run a quick poll.

UPDATE: Apple refreshed its U.S. website before 9 a.m. Tuesday with a change in the iPad line-up (dropping the iPad 2 and putting in its place at the $399 price point a newly-tweaked 9.7-inch iPad with Retina). No sign yet of an 8GB iPhone 5C.

UPDATE 2: We have winner! Apple PR has confirmed that the 8GB model is available in the U.K., France, Germany, Australia and China. It is not, for the time being, available in the U.S. I've closed down the poll with 96 readers (26%) having guessed correctly. Two points: 1) Reports from domestic carriers suggest that the iPhone 5C is selling well in the U.S. and 2) I wouldn't wish a skimpy 8GB on anyone I thought might want to put music, photos or serious apps on an iPhone. 

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