Phil Schiller says Apple would never make a 'cheap' iPhone

Posted:
in iPhone edited January 2014
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.

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"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.
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Comments

  • Reply 1 of 198
    Damn straight, Phil.
  • Reply 2 of 198
    2oh12oh1 Posts: 503member


    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.

  • Reply 3 of 198


    EFF YES. You tell 'em, Phil.

  • Reply 4 of 198
    quadra 610quadra 610 Posts: 6,756member


    I still see "we don't ship junk" is still in effect at Apple. 


     


    :)

  • Reply 5 of 198
    19831983 Posts: 1,224member
    Well maybe now after Schiller's statement, the rumour mill concerning this subject will stop! A cheap, plastic 5" iPhone just doesn't make any sense for Apple the brand.
  • Reply 6 of 198
    jfc1138jfc1138 Posts: 3,090member


    ""In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit.""


     


    Follow the money.

  • Reply 7 of 198
    Once again Gene Munster Wrong. This time Apple exec has downplayed his rumors of a cheaper IPhone Hopefully soon the SEC follows up on the market manipulation.
  • Reply 8 of 198
    jungmarkjungmark Posts: 6,864member
    2oh1 wrote: »
    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.

    Apple needs a cheap iphone just like it needed a netbook. Analysts never learn.
  • Reply 9 of 198
    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.
  • Reply 10 of 198
    quinneyquinney Posts: 2,528member
    "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."

    I think this is what someone in another thread called "getting mauled" in phones.
  • Reply 11 of 198

    Quote:

    Originally Posted by GadgetCanada View Post



    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.  

  • Reply 12 of 198
    allenbfallenbf Posts: 993member


    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

  • Reply 13 of 198
    The rumors like the cheaper iPhone are, plain and simple, are others attempts to manipulate stock prices in the market for micro and day traders..

    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.
  • Reply 14 of 198


    End of story.


     


    PS: Shout-out to gatorguy for originally posting this piece of news!

  • Reply 15 of 198

    Quote:

    Originally Posted by GadgetCanada View Post



    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.

  • Reply 16 of 198
    Am I the only Apple lover who is worried by this news? It wasn't that long ago that Apple had 50 percent of the smart phone market. 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? Should we continue to be thrilled?
  • Reply 17 of 198


    Originally Posted by Slicksim View Post

    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?

  • Reply 18 of 198
    why the hell would Apple even risk cannibalizing their high cost swag for some cheap sh**!
    It would mean a point of no dam return.
  • Reply 19 of 198
    paul94544paul94544 Posts: 1,027member
    Notice what he didn't say. He didn't say "Cheaper" and the stock price rises, this tells me that investors were selling based somewhat on prospect of less margins. now that this rumor has been squashed back to normal margin forecasts.
  • Reply 20 of 198
    maestro64maestro64 Posts: 5,005member

    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.

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