Apple Needs To Rethink Supply Chain To Make a $100 iPhone Says Former Apple CEO John Sculley

News of Apple slashing orders of iPhone 5 components has put pressure on the company’s stock. It has also sparked speculations that Apple may be working on a cheaper iPhone at least for the emerging markets where a majority of the smartphones being purchased are low-end smartphones.

Former CEO of Apple,  John Sculley, also believes that Apple should look at launching a cheaper iPhone for the emerging markets as the market in developing markets like the U.S. and Europe gets saturated.

To achieve this Sculley believes that Apple needs to overhaul its supply chain.

“Apple needs to adapt to a very different world. As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably.”

Describing Samsung as “an extraordinarily good competitor,” he pointed out that “the differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see”. But Sculley believes that Tim Cook is “exactly the right leader” for the job as he is the world’s greatest expert on supply chain.

Recent reports have indicated that Apple is working on a cheaper iPhone with a plastic casing, which could be priced for $99 to $149. Frankly, I think that’s wishful thinking.

As Brian X. Chen of The New York Times points out, even if Apple does end up launching a cheaper iPhone, I doubt it will be that cheap, it will most likely be available for $249-$399 without a contract, which will still make it cheaper than iPhone 4, the cheapest iPhone currently that is available for $450 without a contract. We’ve already seen Apple use a similar pricing strategy with the iPad mini, which is more expensive than the 7-inch tablets from Apple’s rivals, but cheaper than the full-sized iPad. It seems to have worked quite well for them.

Via: Bloomberg

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Categories: Apple News, iPhone News

  • Kimk69

    Seriously, Sculley?

    • iPhoneHacks

      Agreed, but think he’s right about Apple needing to adapt for the emerging market. But guess, it doesn’t need a genius to figure that out.

      • Jeremy Taco Patterson

        There’s a reason he’s FORMER CEO John Sculley. Maybe it’s just my inner iSheep, but I believe Apple is in PRETTY damn good hands. Who am I to question Cook & Co?

      • eugene

        why is that article up of John Sculley on iPhone hacks. he almost bankrupted the company and ruined apple. dont listen to him. a cheaper iphone is out. its called the iphone 4 with contract. $0

        the price of each iphone will go down but if people really wanted a iphone people just go online (craigslist or ebay) and buy a used one.

        People pay for premium for good stuff. there is NOT going to be a CHEAP iPhone or release two products of the same year. Apple will never do that and has never done that. so stop this rumor.

        iPhone still sells millions of the new iPhone 5 because its the best smartphone on the market, bar none. People pay higher prices for better quality, that’s everything in life

        • iPhoneHacks

          Agreed on the Sculley front. I should have probably mentioned that it’s from a guy who Steve Jobs thought was a deusche bag and he is probably stating the obvious, which Apple would have already taken care of if it making a cheaper iPhone.

          The last person they need is Sculley to tell them.

          Regarding cheaper iPhone is out. The iPhone 4 costs $450 without a contract, that is still not cheap. According to rumors, the cheaper iPhone could be priced at $99 to $149. I think its pretty agressive, knowing Apple it would be in the $250 to $350 range, assuming Apple does end up launching a cheap iPhone.

          • Eugene

            Lets see if it comes out but I doubt it. They focus on only creating the best products. Not cheap knock offs of HTC or Motorola crap

          • iPhoneHacks

            True, but they will use the same strategy that they used for iPad mini. It is not the cheapest 7-inch tablet, but it is cheaper than the full-sized iPad.

            Apple really needs to innovate and launching smaller and bigger variants can be one of the strategies. In case of the iPod, before Apple launched the iPod mini, Apple only had 35% market share, but it jumped to 75% within 18 months of launching the iPod mini and then the iPod shuffle, took the market share even higher.