John Sculley says Apple needs cheap iPhone for emerging smartphone markets - Page 3

Never again put the company in the hands of a bozo.

 

No, the iPad does not address the netbook question. It's not a different answer to the same question. That's what the Surface is. It's a different answer to a different question. Apple isn't going to have any trouble avoiding "marginalization", because they aren't at risk of marginalization. And, in the cheap cell phone market, which is most of Android, there isn't any lost market share for Apple, just like there wasn't any lost market share for them in the netbook market. Market share that is worthless, isn't market share worth having. Just ask Dell and HP. Why compete for less than table scraps? The ecosystems? There is no ecosystem in the cheap cell phone market.

 

Cheap smartphones are a commodity, just like cheap computers. There's no reason to be in that market if you want to make money. There's no reason for Apple to sell a "cheap" iPhone.

So based on what you consider "Spot on" you believe it is good for consumers to spend more than what they can really afford? Based on being the great economic guru(sarcasm) how is good for the economy when people to be spending more than they can afford?

 

Also elite went out the window a long time ago. Steve Jobs said Apple would never sell a computer for 500.00 Apple never wanted that business. Yet when personal computer numbers come out everyone on this forum gets pissed because they don't include the iPad. So is the iPad a personal computer or not? If so then Apple is selling million of personal computers at 499.00

 

When the iPhone was released Steve Jobs said that free phones are free because that is all they are worth. Odd because an iPhone can be had for free with a contract. Not an iPhone 5 but still an iPhone

 

iPhone 5 being sold at Walmart with Straight Talk. Unlimited Talk, Text and Data for 45.00 no contract, that just smells elite. If owning an iPhone makes someone elite then there are millions and millions of 15 year old kids that are elite.

And if Tim Cook does this are all the naysayers here going to call for him to be fired? Having a strategy for emerging markets is not equivalent to participating in a race to the bottom. No one here is suggesting Apple start making crappy phones.

 

Steve Jobs never said that.

How exactly are you defining "cheap"? Low cost or low quality? Or are you suggesting for Apple to make a lower cost iPhone it would have to be low quality?

Isn't free cheap? It's interesting when I got on Verizon the iPhone 4 is free. All the new Android phones are the same prices as the iPhone 5 with a two year contract. You have the same problem as the other troll thinking you are elite.

Yes he did.

 

Not in the slightest.

 

"We don't know how to make a $500 computer that's not a piece of junk."

—Steve Jobs

—2008

—Referring to laptops only

—Guess they've learned something since then, anyway.

Hey John, nobody cares. You had your shot.
 

Well, that settles it then, doesn't it?

"Asked about PC prices in the current economy and the new netbook category that is "getting a lot of hype", Jobs said "well, again, this particular downturn is not creating a market of cheaper computers. That market has existed for some time. And there are parts of that market that we choose not to play in.""

 

This was in context when it came to Apple going after the netbook market. On this site there are hundreds if not thousand of posts proclaiming that the iPad is what killed the netbook market. Steve Jobs decided to play in a market he said he didn't want to play in which is the low end price point personal computer market.

 

My key point is Apple played the elite market card when they couldn't get a market share worth talking about, when you sell hundreds of millions of iPhone a year and millions of iPads a year your products while being of high quality are not longer only for the elite. The elite is what long time Apple owners hold onto to try and feel like they are still thinking differently.

 

If owning an iPhone makes someone elite then I need to reconsider my opinion of the lady standing in line in front of me at the market with 12 kids using her EBT card while texting on her iPhone. When she went 10.00 over she didn't have ten dollars but she was still texting on her iPhone.

 

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Edited by MacRulez - 5/16/13 at 12:27pm

 

No he didn't, he created a new market, and the market you're talking about evaporated.

 

No, because Verizon isn't getting those phones for free. You pay for it with your contract. The market under discussion is a cheap phone the consumer pays for in a non-contract market. Completely different markets.

 

See you then, you won't be missed.

 

In the context of this discussion, yes. They aren't going to start making the netbooks of smartphones.

 

No, really, you're pretending that netbooks and tablets are the same thing. You're actually doing this.

 

That's like saying, "since the iPhone killed the dumbphone market, the iPhone must be a dumbphone". 

I didn't say Apple should make crappy phones, but a less expensive smart phone for what has become a commodity market.  This market is going to get more competitive with BB10, Nokia and others wanting to get in, and where do they get in except at the bottom by offering features for less money.  Let's stop the market erosion and keep consumers in the ecosystem.  As far as what happens to Cook when they come out with this, it will a magnificent strategy properly aimed at its target market to keep Apple in front of their worldwide consumer base, while moving on with new products that continue to impress and create profitable growth.
 

When has Apple ever done the obvious?

Obvious: exit the hardware business and license your OS to clone makers
Apple: become even more vertically integrated from chips to software

Obvious: shut it down and give the money back to the shareholders
Apple: iMac, Mac OS X, iPod

Obvious: electronics retail is hurting with the closing of circuit city, computer city, CompUSA
Apple: opens and expands the Apple Store

Obvious: "nobody will pay for songs because of rampant piracy"
Apple: iTunes Music Store dominates music retail

Obvious: "Floppy disks and optical drives are so inexpensive, why not include it?"
Apple: removes built-in floppy and optical drives fearlessly

Obvious: USB 3.0, DVI
Apple: Thunderbolt,Thunderbolt

Obvious: integrate iPod functionality into a phone; Motorola ROKR
Apple: iPhone

Obvious: Netbook
Apple: iPad

Obvious: you can't do email on a phone without a physical keyboard
Apple: no physical keyboard

Obvious: tablet should use a stylus in place of a mouse
Apple: tablet should use a multitouch screen with a natively touch UI

Obvious: keep using the 30-pin dock connector as it is a de facto standard
Apple: Lightning connector

Obvious: Pros want 17" laptops with high resolution screens
Apple: ends MacBook Pro 17"

Obvious: the PC market is racing to the bottom and margins are getting razor thin
Apple: still selling Macs over $1000 and $2000

Obvious: sell the iPad Mini for $299
Apple: iPad Mini starts at $329

Obvious: Add touch screen and stylus input to Wintel laptops
Apple: MacBooks keep focused on mouse/keyboard input

Obvious: keep making phone screens larger regardless of how impractical it becomes
Apple: iPhone 5

Obvious: add apps to a TV
Apple: TBD

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Edited by MacRulez - 5/16/13 at 12:27pm

 

Fixed, embarrassingly (for the rest of the industry).

 

Not with those I don't respect.

My opinion is that I don't think this guy is worth listening to.


Luxury customers are Apple's intended audience. These are the same people who don't even think twice about dropping a fortune on a Lexus or buying a multi-milliondollar home. They don't care what the product costs, nor do they care how much money an app costs to "unlock all the hidden costs", which is why developers target the iOS devices. If you want to make money, you target the iOS and Mac OSX devices first.

When you watch television in the US, what do you see? Apple gear. Not Samsung. Samsung has no unique styling that someone could immediately identify and go "Cool that CSI guy uses a Samsung phone, I want one." No instead you see all the cool Apple gear.

Android devices are stuck in an ironic position, being linux devices but not being open. They're subject to a bunch of hypocrisy surrounding GPL and open-source fans. Those that politically believe that their toys should be hackable, and those that believe that because it's hackable, no software is worth paying for.

Take a look at the web statistics of any website. http://www.w3counter.com/globalstats.php iOS outnumbers Android, 2:1 or better, yet the shipped numbers seem to be reversed. Just where is 50% of the Android phones being shipped going? Some landfill?

That's easy when you have protection behind your computer. Question is are you man enough to do it in person without having your teeth handed too you? You are a tiny little weak man hiding behind is MBP. See how easy it is to stay something stupid and base an opinion on someone because you don't like their view on a stupid Apple enthusiast forum.

 

At least make an attempt to grow up.

Easy guys. Easy. It's a discussion about a f*ckin' phone.

 

Pay no attention, he has anger management issues.

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Edited by MacRulez - 5/16/13 at 12:27pm

Really? So you can get me an iPhone 4 for free? Where? I'll take 5.

Signing a two year contract at a premium price with mandatory data plan is not free. The discussion about low cost phones revolves around developing countries which don't use the "we'll get our money back two fold by hiding the cost in the monthly plan" model.

I read somewhere that the middle class in China is greater in numbers (not in percentages, of course) than the US middle class. There's plenty of demand for Apple products in Asia without introducing a loss-leader bargain basement product. The launch of the iPhone 5 demonstrates that quite nicely.

 

I prefer to take advice from Woz...

 

I wouldn't.  The iPod touch still sells in the millions every quarter because there is still significant market demand for a standalone media/internet/gaming device that does not require monthly voice/data plan charges.  Plus, it expands the market reach for iOS to include those segments not covered by the iPhone (e.g., customers on unsupported carriers, prepaid customers, family plan customers on a different platform, customers that do not want cell service, etc.).  Taken just as a gaming device, the iPod touch (and the wi-fi iPad models) competes directly with the PSP and Nintendo DS platforms, while simultaneously supplementing Apple's user base in the mobile OS space.  Android and the other mobile OSes do not have anything equivalent to the iPod touch, or at least anything that sells anywhere near the iPod touch's numbers. 

 

How much cheaper are you thinking?  An iPod touch starts at $200 -- no contract, no monthly fee.  The cheapest unsubsidized iPhone will run you $450. 

 

An iPod touch with the A6 chip starts at $300, while an unsubsidized iPhone 5 starts at $650.  What would Apple need to cut out in order to migrate the iPhone to a price point where it can feasibly replace the iPod touch?

I thought I had read that, too, but couldn't find any source to back it up so I excluded it. What I can say is that the middle class is growing and a fast rate which is a reason Apple (any many other companies) should be focusing more attention on them.

I mis-stated. It's not just larger than the US Middle Class, it's larger than the entire US population:
http://money.cnn.com/2012/04/25/news/economy/china-middle-class/index.htm

And this sheds some light on the future:
http://www.forbes.com/sites/kenrapoza/2011/09/05/within-a-generation-china-middle-class-four-times-larger-than-americas/



In the end, it's a mistake to think of China as an impoverished country full of drones.

Actually, I think you'll find that the Apps are the reason to be in the market.

 

If 95% of the worlds phones run a 'commodity' Android phone, how do you think the app market place will end up?  Will people make the iPhone #1 when developing apps? 

 

Therefore to make iOS the platform standard that continues to be developed on first, you have to have massive market share.  Therefore you need to be selling a phone that makes it the standard and is a revenue generator from the hundreds of millions (even billions) of users buying apps.

 

So why would Apple make a phone that can't run them?

Well, depending on whose numbers you believe, iOS has 1/2 to 1/3 the marketshare of Android. And yet developers make more money on, have less piracy on, are more satisfied with, and flock toward iOS, rather than Android.

This guy dosn't give a damn about what the world thinks of him. I'll give him that.

Yes, this is exactly what Apple needs after Steve Jobs is gone, advice from Sculley.

The issue is not should Apple make a 'cheap iPhone' it's how does Apple address emerging markets were carriers do not subsidize the purchase of the device? 

 

I worked at Apple when Scully was CEO and quite frankly he did not identify Apple's real problem at the time. It wasn't that Apple couldn't compete on price with the PC manufacturers. It's that Apple quit innovating and lost it's differentiation to 'Wintel'.

 

Frankly, I trust Apple's current management to make the right decision here. Steve Jobs is never coming back, but Apple still has highly talented employees who are dedicated to carrying on Jobs vision. BTW, if anyone wants an autographed copy of Scully's book let me know