Although it makes sense from both marketshare and potential growth standpoints, Phil Schiller has thrown an icy splash of reality into rumors of a cheap or low-cost iPhone coming out—soon or ever. In an interview with the Shanghai Evening News, Schiller said that Apple isn’t making a cheap iPhone “to grab marketshare away” from competitors.
With a raft of reports, sources, rumors, and analysis that Apple “must”, “is”, or “will soon” create a cheap, low-cost iPhone to break into emerging markets like India and China, it’s hard not to jump on the bandwagon. I’m on the fence. I think it makes sense in general, but I also don’t think that’s what Apple is about right now. Between consumer experience, high quality, and high profit margins, it’s pretty hard to see how a cheap iPhone isn’t just selling out. I might sound like I’m reading from the Apple fanboy playbook, but at least it sounds like I’m on the right page with Apple execs. During his visit to China with Time Cook, Phil Schiller was interviewed by the Shanghai Evening News and is quoted as saying:
“We are not like other companies, launched multiple products in one breath, then pinning his hopes on a product to get the favor of consumers,” said Schiller, according to the translated report. “Competitors launched many dimensions new products, but after purchase will find no suitable software products and user experience.”
The report noted Schiller repeatedly stressed that user experience is the key to winning Apple, and the Cupertino, Calif.-based company only considers using the best technology, such as production processes, Retina screen, aluminum alloy, etc., when creating a new product to provide the best products for the market.
“So a lot of people in the Chinese market using a functional machine, some manufacturers use cheap smartphones replace feature phones, but this is not Apple’s product development direction,” Schiller explained, when asked to respond to rumors that Apple will lower the price of products to occupy the market share.
Of course you could slice and interpret this as Apple is still working on a cheaper device, just not to gain marketshare. Let’s face it. Apple doesn’t have to do anything. They are making amazing profits, even segments of their business (like just the iPhone, iPad, or iTunes) are doing better than entire companies (like Microsoft), so if Apple wants to fly in the face of conventional wisdom for a bit, they can afford to.
I will add the caveat that I suspect Apple is working on a cheaper iPhone, just like it’s working on dozens of projects and products that might never see the light of day. Working on a cheaper iPhone could yield a lot of benefits to all the other existing lines by just seeing how to keep quality high and costs lower.
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