Friday, January 11, 2013

Reuters retracts story that said a cheaper iPhone is not coming

Reuters has retracted s story it posted on Thursday. The major media outlet said that it had withdrawn its original story, which stated that Apple was not going to create a cheap iPhone.

Reuters said its earlier story was based on a Shanghai Evening News report that was "subsequently updated with substantial changes to its content." It added that it did not indtend to post a new story.

Reuters original story had quoted Schiller as saying:
[...] 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.
It's unclear exactly what the "substantial changes" made to the story are. The original story -- or perhaps the modified one -- remains hosted at, and the text, at least as translated by Google Translate, claiming that Schiller said Apple will not develop "cheap smartphones," with the translated text saying Apple will not develop "cheap smart phones will not be developed in order to grab market share away."

The original Chinese report drew attention due to recent rumors claiming Apple plans to build a lower cost iPhone and ship it by the end of this year. The Wall Street Journal said that the device would target emerging markets such as China, where cost, particularly sans contract, had led to Android dominance. That report was backed by a Bloomberg report that said that the lower-cost device would be priced between $99 and $149. It was unclear if that price was subsidized with a contract or not. Meanwhile, earlier in the week, DigiTimes also wrote that Apple would ship a cheaper device, but with a larger screen, rather than the smaller-sized device most have been expecting. Currently, Apple's lowest-priced iPhone is the iPhone 4, which can be acquired for free with a new two-year service contract. However, when purchased sans contract, and thus without subsidy, the iPhone 4 costs $450 in the U.S., and taxes increase that price to $490 in China and $750 in Brazil. Withdrawing the story doesn't necessarily mean a lower-cost iPhone is coming. We assume Apple did not ask the to retract the story. After all, the Reuters story cast doubt on the earlier ones, which one would think secretive Apple would love.

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