Thursday, January 10, 2013

Cheaper iPhone not in the cards for Apple: Schiller

Apple's SVP of Worldwide Product Marketing, Phil Schiller spoke indirectly about the low-priced iPhone rumors that have been flying around recently. While not coming out and saying "no lower-cost iPhone is coming," Schiller said that cheap smartphones are not the future of Apple products.

Schiller said:
[...] every product that Apple creates, we consider using only the best technology available. This includes the production pipeline, the Retina display, the unibody design, to provide the best product to the market. [...]

At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out. Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20 percent, we own the 75 percent of the profit.
That profit margin can be seen in Samsung's recent results. Although the Korea giant estimated it will top Apple's calendar year Q3 2012 earnings -- mind you, with its own Q4 2012 earnings -- it did so with considerably more revenue.

Samsung's $8.3 billion in profit took $52.7 billion in revenue. Apple's $8.2 billion took only $32 billion in revenue.

Schiller's statements run counter to three rumors, two of them from yesterday (from the Wall Street Journal one published in the Wall Street Journal and one in Bloomberg) and one from the day prior (DigiTimes).

While the details of the reports differed, they all said that Apple was planning to sell a cheaper iPhone to better compete with Android phones in emerging markets and in regions where carriers sell devices only unsubsidized.

To be clear, however, Schiller didn't say a lower-cost iPhone wasn't coming. The statement, that Apple uses "only the best technology available" could refer to the fact that cheaper may mean less capable and with cheap parts that don't fit in with Apple's perceived quality.

Many believe that Apple needs to better attack the lower-cost smartphone market with a phone in a different manner than just selling an older device at a lower price.

The iPhone mini, as many have dubbed it, due to the assumption it would be both smaller and lower-cost, has been rumored for years.

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