• Phil Schiller: Cheaper Smartphones Will Never Be the Future of Apple's Products

    by
    Akshay Masand
    Published on 2013-01-10 09:41 PM
    20 Comments Comments


    There seems to be a lot of buzz about the possibility of a low-cost iPhone recently. When asked about the chances of it happening, Apple Marketing Chief Phil Schiller said that the Cupertino California company is not interested in making cheap, low-profit products. The comments, which were originally made to the Shanghai Evening News, are not a guarantee of what’s to come. If you look in the past, the company famously denied the effectiveness of a smaller, less expensive tablet before releasing the iPad mini last October.

    Schiller’s interview, which was confirmed by Apple to The Next Web, came in response to recent reports claiming that the Cupertino California company wants to release a cheaper contract-free iPhone this year. The said device was mentioned to be geared towards emerging markets such as China, which Schiller visited this week along with Apple CEO Tim Cook.

    According to Schiller, basic “feature” phones were initially popular in the Chinese market, while “cheap” smartphones are currently the most successful. He specifically pointed out that Apple wouldn’t be going down the same path though. Schiller said the following regarding the matter:

    Despite the popularity of cheap smartphones, this will never be the future of Apple's products. In fact, although Apple's market share of smartphones is just about 20 percent, we own 75 percent of the profit.
    The rumors of a less expensive iPhone originally picked up after The Wall Street Journal reported that Apple is working on a new handset that could possibly hit the market as soon as this year. It was mentioned that Apple’s interest was in response to growth of Android handsets in the low-end market. Rumors of a contract free less expensive iPhone model aren’t new though. Apple has opted to just keep around previous years’ models and sell them at a lower price to compete in the market.

    Source: Shanghai Evenings News, The Next Web
    This article was originally published in forum thread: Phil Schiller: Cheaper Smartphones Will Never Be the Future of Apple's Products started by Akshay Masand View original post
    1. Categories:
    2. iPhone,
    3. Apple
    Comments 20 Comments
    1. feidhlim1986's Avatar
      feidhlim1986 - 2013-01-10, 10:39 PM
      But but but..... Every year MMi keeps reporting that a budget iPhone is around the corner?
    1. MXCO's Avatar
      MXCO - 2013-01-10, 10:46 PM
      Cheaper phone means lower resale value just saying, I make a little side money reselling iPhone 5's.
    1. peacedog's Avatar
      peacedog - 2013-01-10, 11:15 PM
      I hope Apple doesn't make cheap, inferior iPhones. The market is flooded with cheap, inferior phones already. Take your pick.

      Pony up your cash if you want an iPhone. Or get the previous year's model for a discounted price. Personally I don't think getting a year old model is worth saving $100.
    1. thazsar's Avatar
      thazsar - 2013-01-11, 01:10 AM
      Thank goodness this STUPID rumor has been officially squashed!!!! Annual releases of iDevices make the previous versions cheaper...what more do u want?
    1. decoy88's Avatar
      decoy88 - 2013-01-11, 01:50 AM
      B.S. if it makes enough business sense it will happen. Plus its not like there would be much fragmentation, since phones and ios are integrated
    1. scorpluto's Avatar
      scorpluto - 2013-01-11, 04:03 AM
      iPhone coming up with cheaper ones are not good news. When we think of iPhone, it comes upon as " super cool brand" with certain elegance. Hope it stays that way and don't come down with the cheaper ones.
    1. kyphur's Avatar
      kyphur - 2013-01-11, 06:12 AM
      It would fit with t-Mobile's strategy of moving away from subsidized handsets.
    1. Jahooba's Avatar
      Jahooba - 2013-01-11, 06:14 AM
      "We like being overpriced" is what he's saying. Jerks.
    1. thazsar's Avatar
      thazsar - 2013-01-11, 06:22 AM
      Seriously, though, what would u want a cheaper iPhone to have??

      -Bad battery life
      -Low Megapixel camera/video
      -Slow processor
      -LED screen
      -'Smaller' screen (?)
      -4GB or 2GB memory
      -Plastic
      -3G Antenna

      I don't know about you all but none of that is appealing to me! So, what are you expecting from a low-end iDevice?!?!? Please explain...
    1. jOnGarrett's Avatar
      jOnGarrett - 2013-01-11, 09:50 AM
      Quote Originally Posted by peacedog View Post
      I hope Apple doesn't make cheap, inferior iPhones. The market is flooded with cheap, inferior phones already. Take your pick.

      Pony up your cash if you want an iPhone. Or get the previous year's model for a discounted price. Personally I don't think getting a year old model is worth saving $100.
      there are some phones that make the iPhone 5 look cheap an inferior so apple adding another "OPTION" for customers would be a plus. but hey, we all know apple is about profits not choice.
    1. Faresismail's Avatar
      Faresismail - 2013-01-11, 10:09 AM
      Quote Originally Posted by thazsar View Post
      Seriously, though, what would u want a cheaper iPhone to have??

      -Bad battery life
      -Low Megapixel camera/video
      -Slow processor
      -LED screen
      -'Smaller' screen (?)
      -4GB or 2GB memory
      -Plastic
      -3G Antenna

      I don't know about you all but none of that is appealing to me! So, what are you expecting from a low-end iDevice?!?!? Please explain...
      Wow this is the most perfect description of an iphone 4 !! ( maybe not 6-7 though )
    1. dannyrocket's Avatar
      dannyrocket - 2013-01-11, 12:33 PM
      What's wrong with the iPhone4?
      Correct me if I'm wrong but didn't Consumer Report rate the iphone5 the worst smartphone on the market?

      If you can't afford it than you shouldn't have it!
      I'm glad they are not making a "cheaper" iPhone! Fix what you have first.
    1. Faresismail's Avatar
      Faresismail - 2013-01-11, 12:44 PM
      Quote Originally Posted by dannyrocket View Post
      What's wrong with the iPhone4?
      Correct me if I'm wrong but didn't Consumer Report rate the iphone5 the worst smartphone on the market?

      If you can't afford it than you shouldn't have it!
      I'm glad they are not making a "cheaper" iPhone! Fix what you have first.
      Maybe im wrong but the way i see it: the iphone5's specs are way better than the iphone 4's however, the reason why the iphone 5 is not selling its because the iphone 5 brought nothing new ( maybe the shape but its such a little change ) the UI is still the same ( with minor changes...) is you recall, the difference between ios 4 to ios 5 and compare it to the changes that took place between ios 5 and 6 :/:/:/ i believe that the ios 6 should be a minor update...

      My point is the iphone 5 as specs is a good phone but no one is buying it coz apple is lacking changes
    1. ryanortiz's Avatar
      ryanortiz - 2013-01-11, 02:36 PM
      Since they want a cheaper iPhone for emerging markets, recycle the 3GS. As much as I hate to admit it the 3GS overall is still a pretty good smartphone. I use an iPhone 4 and cant wait till I can update/upgrade. I was shocked to see how overall the 3GS works with the latest iOS. The only thing Apple would have to do is keep the firmware updated to be compatible with all upcoming APPS.
    1. CZroe's Avatar
      CZroe - 2013-01-11, 04:44 PM
      Quote Originally Posted by thazsar View Post
      Thank goodness this STUPID rumor has been officially squashed!!!! Annual releases of iDevices make the previous versions cheaper...what more do u want?
      No it hasn't. What you are doing is WORSE than rumor-mongering. You are taking your own interpretation and running with it without even looking at what the man really said. The guy simply said that the company is not interested in making "cheap, low-profit products."

      For example: $350 is easily do-able. $350 is not "cheap" nor is it "low profit" if the economies of scale apply. It is about half the price of the latest unsubsidized iPhone. Remember what they originally charged for the iPhone WITH contract?! $500 for 4GB!

      Just what do you think iCloud was all about? Get the cost of the handset down (very little local storage) and charge a fee to expand your storage to their cloud (only the first 8GB or something is free)!

      Another BIG incentive is that they can more quickly cut their dependency on Samsung and switch entirely to the Lightning connector by ending the older device product lines sooner and replacing them with this.

      Number of ways to make a cheaper, but profitable iPhone:
      Lower performing SOC (compared to latest $600 flagship phone)
      Smaller, lower-resolution screen (back to 3GS resolution and the huge number of Apps that support it)
      High-capacity battery not needed (due to lower performance target)
      Low internal storage capacity (due to cloud storage and potential for profits from cloud services)
      Plastic shell (like iPhone 3GS), possibly even plastic touchscreen (like other cheap phones)
      No flash or other camera sacrifices (Facetime camera only?)
      Shorter, less-inclusive warranty (due to potential profits from extensions and insurance services)
      Mass-market wireless technology only (no LTE)
      Limited non-essential or rarely-used features (no gyro, no noise-canceling mic, no compass, etc)
      Smaller size (higher DPI at 3GS resolution, lower material costs)
      ...
      I could go on, but I think I'll stop here and point out that what I just described is basically an iPhone mini. Remember: They sell the iPad mini for only $330 and make a nice profit. They also implied that the iPad mini was something they would not do due to it being "too small."

      Heck, if they did all of that they could probably hit $200 with an iPhone mini and still make a hefty profit without carving into their flagship phone sales.
    1. thazsar's Avatar
      thazsar - 2013-01-11, 04:44 PM
      Quote Originally Posted by ryanortiz View Post
      Since they want a cheaper iPhone for emerging markets, recycle the 3GS. As much as I hate to admit it the 3GS overall is still a pretty good smartphone. I use an iPhone 4 and cant wait till I can update/upgrade. I was shocked to see how overall the 3GS works with the latest iOS. The only thing Apple would have to do is keep the firmware updated to be compatible with all upcoming APPS.
      Very true but Apple wouldn't even need to make it upgradable! Android produced SEVERAL new phones whose FW was outdated, right!?!? LOL!
    1. WithinTemptationFan's Avatar
      WithinTemptationFan - 2013-01-11, 06:00 PM
      People who believe this are living in fantasy land >.>
    1. Mrteacup's Avatar
      Mrteacup - 2013-01-12, 06:27 AM
      Quote Originally Posted by Jahooba View Post
      "We like being overpriced" is what he's saying. Jerks.
      No. He's saying it doesn't make sense to make an inferior cheaper product in their business philosophy.

      You don't have to support a product you don't agree with, however you don't have to verbally make a scene about them on an apple news forum.
    1. Donnutt's Avatar
      Donnutt - 2013-01-12, 10:19 PM
      Apple will NEVER make a cheaper iPhone. Right now, you can get an iPhone 4 which is still a very capable smartphone, for free with contract, or $300 contract free. People who want a cheaper iPhone can get those. What most whiners seem to want, is an iPhone with almost all the capability of a 5 for cheap. Wait for the 5s and it will be $100 off.
      Bottom line, they won't make a cheaper iPhone because they don't need to. iPhone 5 out sold all previous models, and they are getting a huge profit margin.
      Also, if they made a cheaper iPhone, you have to know people would be bashing them for making an inferior product!
      Leave the "cheap" smartphone market to android devices.
    1. thevmax's Avatar
      thevmax - 2013-01-13, 07:30 AM
      AGREE 150% with thazsar!!!
      And as previously mentioned, if you want a deal on an iphone,
      wait until the new one comes out and the buy the previous model.
      Done Deal!

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