"Months of rumors about order cuts and so forth, so let me take a moment to comment on these. No comment on any particular rumor.
I suggest its good to question the accuracy of any kind of rumor about build plans. Even if a particular data point were factual, it would be impossible to interpret that data point as to what it meant to our business. The supply chain is very complex and we have multiple sources for things. Yields can vary, supplier performance can vary. There is an inordinate long list of things that can make any single data point not a great proxy for what is going on."
- Tim Cook, Q1 conference call, regarding rumors that demand for the iPhone 5 was waning. Q3 results? 31.2 million iPhones sold.
Analysts aren't very good at predicting things when they're using isolated data points from the supply chain.
It may be "stupid" for a customer to pick the slightly-cheaper 5C when considering total costs, but there is a market that places greater value on the extra $100 due at sign-up than on the superiority of the 5S over the 5C, and that is a market in which you and I do not take part.
However, the 5c isn't in that market. It's a $550 phone. It's only seemingly "cheap" because the usurious financing that most cell companies use enables them to offer a low down payment amount.
Look at it in two ways. When you lock yourself into a 2 year contract you're going to be paying about $1k for whatever device you upgrade to. The difference between $100 and $200 up front is trivial in comparison to this. So paying $1100 for a $550 phone versus $1200 for a $650 phone is, well, stupid. Even more so when you consider the performance and quality differences between the 5c and 5s.
That's at the high-end, for people who can afford expensive plans and expensive phones. At the low-end the 5c isn't competitive either. If you comparison shop un-subsidized phones on prepaid services you see that you can get LTE android devices in the $200 to $300 range, a Galaxy S3 is only $350. With an S3 and a $35/mo plan (virgin mobile) someone will be saving a minimum of $500 and closer to $1000, for comparable service, over 2 years compared to buying a subsidized 5c from verizon or AT&T. Even more if they opt for a truly low-cost phone (which can be as cheap as $150 unsubsidized for LTE capable devices, and essentially free if you don't care about LTE).
So it doesn't compete on the low-end because it's too expensive and it doesn't compete on the high-end (where its price puts it) because it's missing stuff.
No wonder no one is buying it.