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Apple Marketing VP Phil Schiller Says No to Cheap iPhones

Recently, the Wall Street Journal reported that it's heard rumblings from Apple insiders that the company was considering making a cheaper iPhone—a rehash of the same rumor that it reported back in February 2011.

The idea that Apple would make a less expensive iPhone seems ludicrous; after all, the company's products are built on the foundation of higher cost for higher build quality. Then again, Apple was willing to give a little bit of leeway with the iPad mini, so a cheaper iPhone doesn't seem wholly impossible.

However, in a recent interview with Shanghai Evening News, Apple Senior Vice President of Marketing Phil Schiller stated the contrary. He reiterated what Apple's core philosophy has been. "[E]very product that Apple creates, we consider using only the best technology available," he said. "This includes the production pipeline, the Retina display, the unibody design, to provide the best product to the market.”

"At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out.

"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%, we own the 75% of the profit.”

Though Schiller's comments don't necessarily address the rumors, it seems pretty clear that he's against the idea of a cheaper iPhone just to target a larger market. But that doesn't discount the fact that he may be referring to an iPhone of lesser quality, like the one that Wall Street Journal suggests. Still, we're operating on a lot of "ifs" here, and we can never be sure what Apple is up to until an official confirmation.

Thanks to The Next Web for translated interview responses.

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  • Ragnar-Kon
    Well, I suppose Apple can do whatever they want. Especially considering their plan has been working out for them quite well so far.

    But some people don't want the Cadillac overpriced smartphone, they just want the plain old Chevy. If Apple wants to stay that company that only sells the flashy Cadillacs, then so be it.
    Reply
  • joe nate
    the company's products are built on the foundation of higher cost for higher build quality
    Apple’s market share of smartphones is just about 20%, we own the 75% of the profit

    "No, we won't make a cheap iPhone, because that would cut into our profit margins too much. Higher cost means higher markup! Where did you come up with this higher quality concept?"
    Reply
  • jakes69
    they should just marked down the price and called it the cheap phone. ;-)
    Reply
  • shafe88
    "Cheap iPhones", ROFLMAO
    Reply
  • WithoutWeakness
    "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%, we own the 75% of the profit.”

    They're ripping you off, people. And they know it, they've known it all along. And now they can just tell you it because they know you'll buy their stuff anyway.

    I'm glad we're hitting the point where users are starting to see the flaws of iOS and OSX and moving to other platforms. And I'm glad Linux is starting to see more growth into new markets. This is going to be a great new year for technology.
    Reply
  • sliem
    "very product that Apple creates, we consider using only the best technology available"
    should be
    "very product that Apple creates, we consider using only the best technology available at our price range."

    "In fact, although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit."
    Which means
    "Our only goal is to make as much profit as possible."
    Reply
  • The earlier iPads wiped out the competitions. People said Android based tablets were bad, catch up with Applet iPads, and that's why they don't succeed. Guess what, they're still catching up with Apple's quality, but they're eating some of Apple's lunch. The point is that earlier iPads were better than Android pads, but actually were cheaper (brand name stuffs, not no name), when compare similar models, or similar buyer targets (high end, mid end, etc). So that explains why Android tablets are eating Apple's lunch.

    Even a $0 "smart" phones cost money for about 2 year contract in the US, so there is not much point of making iPhone cheaper actually. They're already cheap comparing to other phones. They also probably makes lots of money for Apple if it's free (with 2 year contract). So, what Apple need to do is producing more variety like the iPods, at various price points (who say iPods are cheaply made, even with lower price?). The variety is about screen size. They need larger size. People laugh at 5" and 5.5" phones, until Samsung sells boat load of them. Who's laughing now? Apple rejected the idea, and upgraded to 4". Now, try to squeeze 1080p into that 4". 1080p is a rage for phones now, so Apple better watch out, regardless if it improves the quality or not. Where else you go? better screen, better cpu, better memory. So screen is a big factor, that Apple is behind.
    Reply
  • wemakeourfuture
    WithoutWeakness"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%, we own the 75% of the profit.”They're ripping you off, people. And they know it, they've known it all along. And now they can just tell you it because they know you'll buy their stuff anyway.I'm glad we're hitting the point where users are starting to see the flaws of iOS and OSX and moving to other platforms. And I'm glad Linux is starting to see more growth into new markets. This is going to be a great new year for technology.
    Yah because a Galaxy S3 or Note II is soooo much cheaper than an iPhone 5?

    For each one, its the base model:

    iPhone 5: $699
    Note II: $729
    S3: $649
    LG Optimus G: $649
    Nokia 920: $599

    Yah the Apple is really ripping people off...

    Also, Linux's penetration on laptop and desktop for average users has not grown in any significance over the past 7 years, where as OSX share actually has.

    Android is very successful, no question about that, as long as its FREE for manufacturers it will be very popular with them. Also, if Google starts in anyways to block features or give advantage to their products with Android over competitors, you will see an exodus from Android, perhaps that would be good for Ubuntu or some Linux variant.
    Reply
  • wemakeourfuture
    nnullThe earlier iPads wiped out the competitions. People said Android based tablets were bad, catch up with Applet iPads, and that's why they don't succeed. Guess what, they're still catching up with Apple's quality, but they're eating some of Apple's lunch. The point is that earlier iPads were better than Android pads, but actually were cheaper (brand name stuffs, not no name), when compare similar models, or similar buyer targets (high end, mid end, etc). So that explains why Android tablets are eating Apple's lunch.Even a $0 "smart" phones cost money for about 2 year contract in the US, so there is not much point of making iPhone cheaper actually. They're already cheap comparing to other phones. They also probably makes lots of money for Apple if it's free (with 2 year contract). So, what Apple need to do is producing more variety like the iPods, at various price points (who say iPods are cheaply made, even with lower price?). The variety is about screen size. They need larger size. People laugh at 5" and 5.5" phones, until Samsung sells boat load of them. Who's laughing now? Apple rejected the idea, and upgraded to 4". Now, try to squeeze 1080p into that 4". 1080p is a rage for phones now, so Apple better watch out, regardless if it improves the quality or not. Where else you go? better screen, better cpu, better memory. So screen is a big factor, that Apple is behind.

    Apple has supply constraints which limit how much changes they can make since they're demand is incredibly high and manufacturing capacity is a significant restriction.

    iPhone 5 will sell close to 50 million units in the first 4 months or so, having enough displays and other components for the finishing product is a constraint to them.

    They were already supplied constrained on displays which caused shortages.

    If they had changed their display substantially they may have only sold 20-30 in the first 4 months.

    Its easier to come with a radically different product and only need to sell a few million units. Even the S3 has half the demand of an iPhone 5, if you look at the differences between the S2 and S3 its as incremental as the 4S and 5, except Apple was able to greatly reduce the weight with increased dimensions where Samsung had to do the opposite and increase the weight.
    Reply
  • j2j663
    wemakeourfutureYah because a Galaxy S3 or Note II is soooo much cheaper than an iPhone 5?For each one, its the base model:iPhone 5: $699Note II: $729S3: $649LG Optimus G: $649Nokia 920: $599Yah the Apple is really ripping people off...Also, Linux's penetration on laptop and desktop for average users has not grown in any significance over the past 7 years, where as OSX share actually has.Android is very successful, no question about that, as long as its FREE for manufacturers it will be very popular with them. Also, if Google starts in anyways to block features or give advantage to their products with Android over competitors, you will see an exodus from Android, perhaps that would be good for Ubuntu or some Linux variant.
    If you really think that Apple isn't ripping you off then you are in iSheep denial. I'm not saying that other companies aren't bad at it but it is a well known fact that Apple is the worst with their markups. Case in point (this was on a TH article) it costs Apple $15-$30 to increase the storage capacity of their phones, yet the final price is $100 for the consumer to step up to the next tier. In fact, check this article out: http://www.ebnonline.com/author.asp?section_id=1893&doc_id=253759
    So much for Apple's superior hardware, it costs them $23/unit more to make the iPad mini than the Kindle Fire HD but iPad mini is double the price of the Kindle Fire HD.

    Oh and you are talking in circles when you say a mass exodus from Android will be good for a Linux variant. If you missed the memo Android is Linux variant, by far the most popular one right now. Plus, the fact that it is an open source platform means that even if Google stopped developing it, it would take a very, very long time to die.
    Reply