The past week has seen rumors percolating that Apple might be looking to release a cheap iPhone, a move that would help Apple compete with Android phones in markets where cheaper phones are doing very well. Most notably this has been occurring in the Chinese market, which holds huge potential for Apple. Apple Senior Vice President Phil Schiller conducted an interview with Shanghai Evening News where he responded to the speculation, saying they would not develop cheap smartphones to grab market share away.
“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.”
Apple’s product strategy has typically been to release high margin, profitable products. Apple earlier today confirmed to TNW that it was indeed Schiller who spoke with Shanghai News. What gets lost in translation is cheap and low-cost. Apple will never do cheap and it’s possible that’s what’s being alluded to here by Schiller in the interview. Cheap,low-cost. It’s all semantics. A $99 iPhone would help compete in those low-end markets and it wouldn’t hurt iPhone sales here in the US. It would also allow Apple to end the cycle of selling older products, which has been their current strategy for offering iPhones at a lower cost.