Tim Cook: Apple 'never' intended iPhone 5C as low-cost smartphone

Apple never intended its new iPhone 5C to be its "low cost" smartphone, preferring to instead bestow that honour on its iPhone 4S, Apple chief Tim Cook said this week.

It was "never our intent, obviously," to make the multi-coloured iPhone 5C an affordable option for those in emerging markets, Cook said during a Monday afternoon earnings call. "Our entry iPhone was the iPhone 4S."

Prior to last month's launch of the iPhone 5S and 5C, there were multiple rumours about the 5C being Apple's way to pick up customers in regions where residents could not afford to spend hundreds of dollars on a mobile phone.

The iPhone 5C is indeed cheaper than the flagship iPhone 5S, but it really just serves to replace the iPhone 5 in Apple's lineup and offer a few more colour options to those who want to branch out beyond black and white.

As a result, the 5C and 5S release prompted discussions about whether Apple knew what "low cost" actually meant. That was followed by reports about the 5S selling better than the 5C.

"We were selling the iPhone 4 in very good volumes, and as we began to experiment in different regions at somewhat lower price points, [we] saw a fair amount of price elasticity," Cook said. Apple is now "hoping and thinking that will continue with the 4S."

The iPhone 4S, he continued, provides access to the entire Apple eco-system at a lower price point. "[We] clearly understand that there is elasticity in the market, and we'll move accordingly."

On the high-end 5S, meanwhile, Cook acknowledged that Apple is still working through a "very significant backlog," but said "we're very confident of our ability to keep ramping."

When asked about the possibility of a Retina display shortage with the new iPad mini, Cook said that "it's unclear whether we will have enough for the quarter or not. We know how many we will have, but you really don't know the demand until after you start shipping, so we'll see how that goes."

Still, Cook was confident that a number of you will be unwrapping iPads this year. "I think it's going to be an iPad Christmas [and] a really great holiday season." Cook also talked up the free iWork that now comes with new Macs and iPads. "Some other folks charge $199" for similar software, Cook said, taking a swipe at Microsoft.

"But we really wanted to make it a part of the experience, so we're making it free," he said. "I think it's just another reason that everyone should buy a Mac."

Apple sold 4.6 million Macs during the quarter, up from 3.8 million last quarter, but down from 4.9 million in the year-ago quarter.

Apple also sold 33.8 million iPhones in Q4, up from 31.2 million during the last quarter and 26.9 million during the same time period last year. The Cupertino-based firm sold 14.1 million iPads, down slightly from the 14.6 million it sold during the last quarter, but up from 14 million a year ago.