Cheapness will "never be the future of Apple products" -- apparently putting paid to rumours of a cheaper iPhone or iPhone mini.
Speaking to the Shanghai Evening News, Apple's marketing boss Phil Schiller ruled out the possibility of a cheap phone from the Californian company.
A budget version of the iPhone is heavily rumoured. The iPhone 5S or iPhone mini or whatever it might be called would take on the wide range of Android smart phones that are more affordable than the iPhone. But Schiller points out that despite iPhone sales making up about a fifth of the phone market, "we own 75 per cent of the profit".
A cheaper iPhone would increase the first number, market share, but the lower revenue generated by each sale means the impact on the second number wouldn't necessarily be worth devaluing the brand. Apple has meticulously carved out a premium reputation for its products, and a budget phone could damage that.
That said, Schiller is talking about cheap phones in the sense of phones that lack the quality of pricier blowers. But with the iPad mini, and before it iPod spin-offs like the iPod mini and iPod nano, Apple has a history of making devices that are still of the same high quality but are, whisper it, cheaper. We still won't rule out an iPhone mini completely.
On the other hand, you could argue that we already have a cheaper iPhone: it's called the iPhone 4. And you could argue that we already have an iPhone mini -- it's called the iPod touch.
Do you think Apple should make an iPhone mini, whether it's physically smaller or just a bit cheaper? Can Apple afford to let Android dominate the middle of the market? Tell me your thoughts in the comments or on our Facebook page.
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anonymous 11 January, 2013 10:35
I think Apple may have just signed their death warrant with this silly statement. There will come a day soon when Android and even Ubuntu phones outsell Apple. Not everyone can afford the £400-500+ for Apple products and it's the kids and young adults who dictate what comes next - and they are all going for cheaper more 'fashionable' handsets.
anonymous 11 January, 2013 10:56
Cheap doesn't have to mean nasty. The Nexus 4 is an excellent example.
anonymous 11 January, 2013 10:57
Cheap doesn't have to mean nasty. The Nexus 4 is an excellent example.
anonymous 11 January, 2013 11:02
It's not a cheaper iPhone that will devalue the brand. Apple's lack of innovation is devaluing the brand. The competition has improved to an extent that Apple's products are simply less desirable than they used to be.
Also the market for their products has matured to a point where customers know enough to decide for themselves what features they want rather than be told what the next big thing is going to be.
shauney3 11 January, 2013 11:34
Good on them. They make great quality premium products and are making £350 profit on each phone they sell. Why change that?
I'm very happy with my Nexus and would still buy it even it it cost £500 like the iPhone, but plenty of people like the iPhone and are willing to pay more than everyone else because they "think" (opinion) they are getting a superior product. If I were Apple I wouldn't change.
anonymous 11 January, 2013 11:45
Nice to know apple are remaining reassuringly expensive.
Damien2501 11 January, 2013 11:46
Apple needs to realise that people aren't buying Android phones because they are cheaper, people are buying 'Droids because of what they offer, they offer productivity, deep customisation and loads of other things. I could have brought an iPhone 4, 2 years ago, I decided to buy a Samsung Galaxy S, which was more or less the same price as the iPhone, but it offered a larger screen, a removable battery and good software.
anonymous 11 January, 2013 12:29
Yeah, people are deffinately buying 'droid gear cause it is cheaper. It does almost exactly the same stuff and its created a great talking point for nerds as to what's better. But apples business model works as does 'droid phones. It's all a matter of taste and budget really.
CaptainPicard 11 January, 2013 14:30
There is another option Apple should consider; Why not decrease the price of the iPhone 5 in regions where it doesn't have a significant market share and increase it when it does have a fan base? I
anonymous 11 January, 2013 16:40
I think a lot of people choose droids because they want a droid over something that is old and dated its partly to do with price but there's some pretty pricy droids out there I could of afforded an iphone I simply did not want one!
Matt Winston. 11 January, 2013 16:58
@Damien2501 I was on holiday for 12 days and now your praising Android and dissing Apple on many posts, are you OK??
anonymous 11 January, 2013 19:45
"But Schiller points out that despite iPhone sales making up about a fifth of the phone market, "we own 75 per cent of the profit".
You have to give it to Apple, they can say this kind of thing and still make so much money. How many other companies can tell people they sell at such extortionate margins, and still be loved so much?
anonymous 11 January, 2013 19:47
With Android declining in the US and their customer satisfaction rates being quite low, no wonder Apple are sticking with what they have price wise. Android has some great parts to it but suffers from lack of organisation between the phone makers in updates. At present no operating system is coming up with something majorly innovative to gain customers, it's all about speed and screen size at the moment. I know people slate Apples IOS but it really works well, I'm guessing IOS 7 will be a major change in looks not that much innovation though as tech seems to have plateaued.
Damien2501 11 January, 2013 21:18
@MattWinston I'm damien2501s evil Android twin! ;)
anonymous 11 January, 2013 23:12
Sure. In the same way that there would never be a 7" iPad
anonymous 12 January, 2013 00:34
anonymous 11 January, 2013 19:45
"You have to give it to Apple, they can say this kind of thing and still make so much money. How many other companies can tell people they sell at such extortionate margins, and still be loved so much?"
That's not what he's saying though.
The 75% figure is 75% of all profits made from all smartphone sales.
apart from Samsung, the other phone manufacturers are struggling to make any money at all. As for Samsung, they are making profits from high volumes.
anonymous 12 January, 2013 20:29
Android is deeply customizable and for some people, especially tech folk, that's great. But the mass market just want something simple and something that works and on the whole, that's what apple does well.
If you have a laptop and/or and ipad as well, the ecosystem of how it all integrates for the not so tech savy ppl is the main reason why it's so popular.
Yes it's got an outdated ios and yes android can do more, but as someone who works in a phone shop, you'd be surprised how little people care about the extra stuff an adroid can do when they're technophobes or casual users. Having too many options can put people off especially if it's their first smart phone.
There is no question that if you know everything about tech and about all the options and how everything works, android wins hands down because you know what apps to download and how to set it up so it all works nicely with all your other devices. But if you don’t, it’s a no brainer that people will go with the proven, easy to use, simplified iOS.
Don’t underestimate the power of an efficient ecosystem, simplicity to use and device integration.
anonymous 13 January, 2013 20:48
Now the megalomaniac totalitarian has left the building the temptation will be for the accountants to follow a path to maximise profits. The phrase power vacuum springs to mind when I think about apples direction and recent trouble at the top.
The quality of apple hardware is a myth. Apple used to make all their components decades ago but not anymore so the component quality cannot be attributed to apple. It can be attributed more to samsung and LG.
The one thing that can be of value to the consumer is the software being optimised to the hardware it runs on. Hence apple gets more out of less.
The other quality attributed to Apple is the materials in outer shell design. It is debatable as to whether Apple have actually got this right over the past few years. The number of cracked iPhone 4's or those that have worn out buttons goes against this.
The point is apple sells itself on quality. Whether it is true or not doesn't really matter so long as the consumer considers it to be true. So apple can never admit that it is going for the mid market even though they must do so to fend off android in price. The can only fend of android in functionality if they drastically change their UI. But I think this would be a potential disaster as it will have to lose its (dull) simplicity, as well as be seen as the market follower.
As it happens CNET now report a change of wording by apple to potentially allow for a lower quality iPhone in the future. What will apple do!?
samuelc 14 January, 2013 10:39
More accurately, what the marketing boss should have said is "value for money will never be the future of Apple."
anonymous 14 January, 2013 18:47
Apple's brand value is their most important asset and they've fought long and hard for it. Their products are iconically high quality, without any compromise to functionality or design. I really don't think a cheaper iphone is likely. Nor do I think its a good idea - I think they're overall profits would reduce, since people who may stretch further to buy an iPhone won't have the incentive anymore. And I think any compromise to build quality and functionality, which would be necessary, would really damage their brand. The ipod-nano/ ipad-mini are not cheaper versions, they are different products for different purposes.