This might seem like a retreat from all of the reports leading up to the 5c's launch. But Cook has a point. As Apple's lineup goes, the 4s is a much cheaper offering compared to the 5c, which retails at $550 before carrier subsidies. The 4s, meanwhile, sells for $100 less at unsubsidized rates and is still a strong product, accounting for 30 percent of Apple's total iPhone sales as recently as June.
In fact, Apple has a long history of retaining its older products as low-priced options. When the iPhone 3GS debuted in mid-2009, it kept selling the iPhone 3G for another year. Then, when the iPhone 4 came out, Apple discontinued the 3G but kept offering the 3GS for an additional two years — even after the iPhone 4s came out in late 2012.
Granting Cook's premise creates other problems, though. If he's right about the 4s being Apple's true entry-level phone, then why does the 5c — which is really just a 5s housed in plastic — exist?
More importantly, it's still not clear that the 4s is cheap enough to be competitive in emerging markets. China's version of the Apple Store advertises the iPhone 4s for $425, $100 more expensive than leading contenders like Xiaomi's Mi-3, which is $327. It's a lot closer to "budget" than the 5S, but still requires a hefty up-front payment.
It's not like Apple can't afford to reduce the price more. The 4s costs the company $188 to manufacture. Even at $425, that's a 126 percent margin.
Even if we accept that the "c" in 5c doesn't stand for "cheap" as we all thought it did, Cook still has some explaining to do.