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Former Apple CEO Speaks on Cheaper iPhone's Importance

By - Source: Bloomberg | B 26 comments

Apple has said it will never offer a cheap iPhone.

Former Apple CEO John Sculley believes a cheaper iPhone is pivotal for the technology giant's future.

The former-executive said in an interview with Bloomberg Television that Apple will have to start focusing on customers residing in developing nations who can't afford high-end handsets, which especially rings true for Apple's premium-priced products.

"Apple needs to adapt to a very different world," said Sculley, who was Apple's CEO for 10 years in the 1980s and '90s. "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."

Stressing that there was "nothing wrong" with the iPhone 5, Sculley said Samsung has now closed the gap pertaining to smartphone features. "Samsung is an extraordinarily good competitor. The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see."

The South Korean technology conglomerate was named the worldwide cell phone market leader during 2012 and has also dominated the mobile market in the United States. Its Galaxy S line of smartphones has sold over 100 million units since the original's launch less than three years ago, with the company expecting to announce a record profit of $8.3 billion for 2012's fourth quarter.

Sculley's comments come after Wall Street Journal's sources said Apple was developing a low-cost version of the iPhone, as well as being told that the company is halving its production for the iPhone 5 due to weakened demand.

Although Apple marketing vice president Phil Schiller said the company will never offer a cheap iPhone, a budget variant of its flagship device is expected to generate upwards of $6.5 billion in revenue.

 

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  • 14 Hide
    esrever , January 22, 2013 3:06 AM
    If you made Ipads $200 people won't buy them because they won't feel superior to everyone else without one.
Other Comments
  • -8 Hide
    A Bad Day , January 22, 2013 2:09 AM
    I don't think Mercedes is going to be selling budget cars anytime soon...

    Though the question is, how much does Mercedes rip off their customers like Apple?
  • 0 Hide
    wolley74 , January 22, 2013 2:14 AM
    it'll be weaker then any other $200 smartphone on the market, but hey for those who want to join the shee- i mean club can get in on it for 1/3rd the price
  • 8 Hide
    calmstateofmind , January 22, 2013 2:18 AM
    Slowly becoming generic...
  • 6 Hide
    magnusolimpus , January 22, 2013 2:20 AM
    No shit sherlock
  • 9 Hide
    Someone Somewhere , January 22, 2013 2:38 AM
    Quote:
    The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see.

    Yes it is - the difference is that it's in the other direction ;) 
  • 5 Hide
    dimar , January 22, 2013 2:58 AM
    I thought iphones were always cheap.

    The one and only way I could see myself buying an iphone is if it has all of the following features.
    FLAC support.
    Highest quality music/audio components.
    Card reader, or two.
    Lets me install Android, windows phone or keep iOS.

    Job's reaction :pfff: 
    Cook's reaction :non: 
  • 14 Hide
    esrever , January 22, 2013 3:06 AM
    If you made Ipads $200 people won't buy them because they won't feel superior to everyone else without one.
  • 4 Hide
    flyflinger , January 22, 2013 3:13 AM
    I don't get it. There's plenty of cheap iPhones. I just got a 4S for $49.... shrug.
  • 3 Hide
    soundping , January 22, 2013 3:44 AM
    I think apple will lose money on these lower priced phones. The low to medium end market is already fully saturated with phones already.
  • -5 Hide
    stevelord , January 22, 2013 3:57 AM
    Andridiots are out in full swing again!

    How has the whole "it has no flash support, can't remove battery, cant put in an SD card and can't support some file format that only enthusiasts use" argument been working for ya over the years?
  • 3 Hide
    ericburnby , January 22, 2013 4:14 AM
    Opinions of ex-CEO's don't really mean much.
  • 0 Hide
    Hpnotiq , January 22, 2013 4:56 AM
    A Bad DayI don't think Mercedes is going to be selling budget cars anytime soon...Though the question is, how much does Mercedes rip off their customers like Apple?

    Like Apple, Mercedes has not been a top class car for quite some time. They're status symbols, for frankly, idiots.

    Pretentious, clueless idiots drive their cars and sport an iPhone to boot.
  • 0 Hide
    agnickolov , January 22, 2013 5:59 AM
    If memory serves me well, Steve Jobs was brought back to Apple as CEO to fix a company on the brink of bankruptcy...
  • 0 Hide
    fatdoi , January 22, 2013 6:07 AM
    if apple going down that path then they'll need to stand losing large group of clientele as those money spending identity searching fanboi group don't want to be associated with the group of 'el cheapo' that barely can afford a cheaper version of the brand they lined up for days and paid premium for..... that will make them very 'uncool'..... it's not about open or closed ecosystem, screen resolution, quad core or 8 core.... it's about the fruit logo behind their phone that makes them 'superior' to others.... a mark of being 'different'
  • 3 Hide
    teknic111 , January 22, 2013 9:31 AM
    John Sculley's lack of vision is what destroyed Apple in the 90s. His advice should be taken with a grain of salt.
  • 3 Hide
    tanjo , January 22, 2013 9:44 AM
    A lot of iSheeps in India (or artist/creative wannabes in other countries) will get mad. iCrap is a status symbol for them.
  • 3 Hide
    Donsai , January 22, 2013 10:16 AM
    teknic111John Sculley's lack of vision is what destroyed Apple in the 90s. His advice should be taken with a grain of salt.

    I couldn't agree more. When I saw this article I wondered why anyone, anywhere is still listening to this assclown. Whether you like Apple or not, Sculley is one of the most useless executives the world has seen in a long time.
  • 0 Hide
    calmstateofmind , January 22, 2013 11:46 AM
    flyflingerI don't get it. There's plenty of cheap iPhones. I just got a 4S for $49.... shrug.


    Overseas people have to buy their smartphones at retail, not with the service provider's considerable discount.
  • 2 Hide
    Non-Euclidean , January 22, 2013 11:51 AM
    stevelordAndridiots are out in full swing again!How has the whole "it has no flash support, can't remove battery, cant put in an SD card and can't support some file format that only enthusiasts use" argument been working for ya over the years?


    Along with other things, very well when you look at market share trends.
    Your vaunted, overpriced iPhone is looking like a Mig-21 being left behind by an F-16 at full burner. Sooner or later the (declining) masses of iSheep are going to insist on a phone that isn't state of yesterdays art.
  • 0 Hide
    acadia11 , January 22, 2013 11:58 AM
    A Bad DayI don't think Mercedes is going to be selling budget cars anytime soon...Though the question is, how much does Mercedes rip off their customers like Apple?


    Sure they do, a series, remember the c hatchback, Mercedes sells a wide variety of cars.
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