If Piper Jaffray analyst Gene Munster is to be believed, the widely rumored low-cost iPhone could help Apple cater to a market representing as many as 580 million potential customers. But it seems that the Cupertino tech giant is not in a mood to take it into consideration as a company executive simply turned the rumor down in a one-to-one interview with a Chinese newspaper.
Apple SVP of Worldwide marketing Phil Schiller told Chinese newspaper Shanghai Evening News in an official interview that regardless of the popularity of cheaper smartphones, this would “never be the future of Apple products.”
Although iPhone’s market share rose in the fourth quarter of 2011 and in the first quarter of 2012, standing at 23 percent, it dropped down drastically to just 14.6 percent worldwide in the third quarter of 2012. Schiller did address this concern, but tried to validate Apple’s current position in the market saying that the low-cost smartphones have created a new segment in the smartphone market, which Apple does not want to explore.
Schiller said that targeting the low-end of the market by making a cheaper iPhone was not Apple’s way of doing things. Instead, in every product that Apple creates, it considers “using only the best technology available. This includes the production pipeline, the Retina display, the unibody design, to provide the best product to 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,” said Schiller.
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Criticizing some of Apple’s competitors for releasing “multiple products in one breath,” Schiller said that after purchasing such products customers often ended up with “no suitable software products and user experience.”
Apple doesn’t want that to happen to its customers, and as Redmond Pie noted, Schiller argued that “a small product line ensures maximum software and accessory compatibility by reducing the effort on the part of developers and manufacturers to ensure that their products work on all devices.”
There is no doubt that Apple’s market share in smartphones segment has dropped notably in recent times, but despite that the company has claimed to have made significant profits.
“At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out,” Schiller added. “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.”
Schiller nailed the cheaper iPhone rumor down. But should his comment be considered conclusive?
“Schiller’s statements aren’t conclusive in the way that they refer to exactly what price points that Apple will be targeting, only that ‘cheap smartphones’ aren’t really Apple’s fare,” said Matthew Panzarino of The Next Web. “This has always been the case and even with the ‘free’ iPhones, you’re still getting top-notch build quality, just from a couple of models ago. A ‘cheap’ smartphone would imply worse materials or construction in order to meet a price point.”
“The iPad Mini is by no means cheap, but it’s certainly more affordable than the flagship iPad 4th generation,” said the report. “Similarly, a more economical iPhone might be a boon for Apple to the extent that they make more money per device sold than they currently do selling older generation models at steep discounts.”
So what’s your take on a cheaper or, to be more precise, an affordable iPhone? Will a low-cost but not cheaply made iPhone debut in 2013?