Apple introduces cheaper iPhone 5C

March 18, 2014: 4:21 PM ET
iphone 5c 8gb
NEW YORK (CNNMoney)

Apple has unveiled a cheaper, smaller version of the iPhone 5C smartphone and brought the fourth-generation iPad back from the dead.

Sales of the colorful, plastic iPhone 5C have been below the company's expectations, and CEO Tim Cook acknowledged in January that Apple (AAPL) misjudged demand for it. As a result, Apple unveiled an 8 GB version of the iPhone 5C on Tuesday in an attempt to boost consumer interest.

The 8 GB edition will only be available in the United Kingdom, France, Germany, Australia and China, Apple told CNNMoney.

In England, the 8 GB version was selling for £429, ($711), slightly cheaper than the 16 GB version, which sells for £469, or $778. Customers in England are unable to purchase a subsidized iPhone from Apple.

The 16 GB iPhone 5C sells for $100 with a two-year contract in the U.S. An unsubsidized 16 GB iPhone 5C purchased directly sells for $549.

Apple also sells an 8 GB version of the two-year old iPhone 4S in the U.S. for free with a new two-year contract.

Will the iPhone succeed in China?

Many analysts had expected the iPhone 5C to be a low-cost smartphone aimed at the Chinese market. In fact, its price was consistent with previous "last-generation" smartphones that Apple has sold, and its plastic shell was designed to help Apple improve its declining profit margins. But the higher-than-expected price has scared off many potential Chinese customers.

Related: Apple Stores now fixing cracked iPhone 5C screens

Still, it's unclear just how much demand Apple can muster up for a smartphone that hasn't proven particularly popular at any price point. In an attempt to clear out inventory, Wal-Mart (WMT) recently slashed the 16 GB iPhone 5C price to just $27 with a new two-year contract.

Also on Tuesday, Apple brought back the fourth-generation iPad with Retina display, a tablet that was replaced by the thinner iPad Air in October. While bringing back the fourth-generation iPad, Apple finally stopped selling the iPad 2 -- a tablet that has been on the market since 2011.

The fourth-gen iPad will only be available with 16 GB of storage, but it will start at $399 -- the same price for which Apple was selling the less-capable iPad 2.


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