Phil Schiller says Apple would never make a 'cheap' iPhone
When asked about the possibility of a low-cost iPhone, Apple marketing chief Phil Schiller said his company is not interested in making cheap, low-profit products.
Schiller's comments, made to the Shanghai Evening News, are of course not a guarantee that Apple will not make a rumored low-cost iPhone. The company famously panned smaller, less expensive tablets before releasing the iPad mini last October.
The interview with Schiller, which was confirmed by Apple to The Next Web, came in response to recent reports claiming that Apple wants to release a cheaper contract-free iPhone this year. Such a device is said to be geared toward emerging markets like China, which Schiller visited this week along with Apple CEO Tim Cook.
Schiller said that basic "feature" phones were initially popular in the Chinese market, while "cheap" smartphones are currently the most successful. But he said Apple wouldn't go down that same path.
"Despite the popularity of cheap smartphones, this will never be the future of Apple's products," he said. "In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit."
One estimate issued on Thursday suggested that about 65 percent of the current smartphone market is comprised of smaller, less expensive handsets popular in China and Brazil. Gene Munster of Piper Jaffray believes a low-cost iPhone would allow Apple to address that market and generate $6.5 billion in revenue at the end of 2013 alone.
Rumors of a less expensive iPhone geared toward emerging markets picked up steam this week, when The Wall Street Journal said Apple is working on a new handset that could hit the market as soon as this year. It was said that Apple's interest was in response to growth of Android handsets in the low-end market.
Rumors of a less expensive iPhone model to be sold contract free are not new. But to date, Apple has instead opted to keep around previous years' models and sell them at a lower price.
Still, Apple's least expensive iPhone is the iPhone 4, first released in 2010, which sells for $450 without a service contract in the U.S. That same device costs $490 in China and $750 in Brazil when taxes are added.
Schiller's comments, made to the Shanghai Evening News, are of course not a guarantee that Apple will not make a rumored low-cost iPhone. The company famously panned smaller, less expensive tablets before releasing the iPad mini last October.
The interview with Schiller, which was confirmed by Apple to The Next Web, came in response to recent reports claiming that Apple wants to release a cheaper contract-free iPhone this year. Such a device is said to be geared toward emerging markets like China, which Schiller visited this week along with Apple CEO Tim Cook.
Schiller said that basic "feature" phones were initially popular in the Chinese market, while "cheap" smartphones are currently the most successful. But he said Apple wouldn't go down that same path.
"Despite the popularity of cheap smartphones, this will never be the future of Apple's products," he said. "In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit."
One estimate issued on Thursday suggested that about 65 percent of the current smartphone market is comprised of smaller, less expensive handsets popular in China and Brazil. Gene Munster of Piper Jaffray believes a low-cost iPhone would allow Apple to address that market and generate $6.5 billion in revenue at the end of 2013 alone.
Rumors of a less expensive iPhone geared toward emerging markets picked up steam this week, when The Wall Street Journal said Apple is working on a new handset that could hit the market as soon as this year. It was said that Apple's interest was in response to growth of Android handsets in the low-end market.
Rumors of a less expensive iPhone model to be sold contract free are not new. But to date, Apple has instead opted to keep around previous years' models and sell them at a lower price.
Still, Apple's least expensive iPhone is the iPhone 4, first released in 2010, which sells for $450 without a service contract in the U.S. That same device costs $490 in China and $750 in Brazil when taxes are added.
Comments
I don't get it. People have been saying that Apple neeeeeeeds to make a cheap iPhone since 2008. Meanwhile, the strength of iPhone sales just increased. When are people going to realize the Apple way isn't the traditional way, but it works.
EFF YES. You tell 'em, Phil.
I still see "we don't ship junk" is still in effect at Apple.
""In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit.""
Follow the money.
Apple needs a cheap iphone just like it needed a netbook. Analysts never learn.
I think this is what someone in another thread called "getting mauled" in phones.
Quote:
Originally Posted by GadgetCanada
SJ also said a smaller tablet form factor doesn't make sense (sanding fingers etc.) yet the iPad mini was made and is selling like crazy. I'm not a business analyst so I have no idea if a cheap iPhone is a smart business move or not but I'm sure they would sell tens of millions. I really don't see the problem of giving users a choice of a premium iPhone or a cheap iPhone. Doesn't bother me at all.
Complete garbage.
The tablets SJ was talking about were the 16:9 7" variety like the Nexus 7 and smaller kindle.
The iPad Mini is a 4:3 7.9" tablet that has 34% more screen area than the 16:9 7"ers. 34% is immediately noticeable when you hold them side by side.
Seriously, though - who are you going to believe? Some guy who works for Apple, or Gene Munster. My money is on Gene!
oh, and
/s
The stock market is a joke. It's about starting misleading rumors now as the expense of others for personal interest/profit. Its middle/high-school all over again. Is this what our US consumerism has come to? Who can we trick and rip-off next? Ethics? Morals? Not here in the US of A.. not for some time.
We're seeing way to much of this.
End of story.
PS: Shout-out to gatorguy for originally posting this piece of news!
Quote:
Originally Posted by GadgetCanada
SJ also said a smaller tablet form factor doesn't make sense (sanding fingers etc.) yet the iPad mini was made and is selling like crazy. I'm not a business analyst so I have no idea if a cheap iPhone is a smart business move or not but I'm sure they would sell tens of millions. I really don't see the problem of giving users a choice of a premium iPhone or a cheap iPhone. Doesn't bother me at all.
they went to quite a bit of effort to suggest that the iPad mini was significantly bigger than the other 7" tablets, though.
Originally Posted by Slicksim
It wasn't that long ago that Apple had 50 percent of the smart phone market.
This never happened.
What happens when Apple has 50 percent of the profits and 10 percent of the market and App developers go else where and no one is using iAds?
What leads you to believe they'd make less money, what leads you to believe they're going to lose marketshare, what leads you to believe developers would ever go anywhere else, and what leads you to believe that iAds makes them any meaningful money?
It would mean a point of no dam return.
Quote:
"In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit."
That is all that matters, but yet again Wall Street will award the 80% who are fighting over the 25% profits. It makes no sense why Wall Street likes high market share at low margins.