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Summary:

If Apple decides to make and sell an iPhone whose full, unsubsidized cost is less expensive than previous models, it’s going to sell it as a different iPhone that’s “more affordable for users,” not “the cheaper iPhone.”

SVP of Marketing Phil Schiller introduces the iPhone 5.

An interview that Phil Schiller, Apple’s SVP of worldwide marketing, gave to the Shanghai Evening News this week at first glance appears to be Apple’s way of subtly shutting down the low-cost iPhone rumor. But if you read his words (albeit translated from the Chinese source to English) carefully, Schiller’s not saying anything we don’t already know about Apple, and it doesn’t preclude Apple from making a smartphone that costs and sells for less than current models some time soon.

When asked about the possibility of making a cheaper iPhone, Schiller said, according to The Next Web:

[E]very product that Apple creates, we consider 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.

Then later, he said that “despite the popularity of cheap smartphones [in China] 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.”

Both of those statements aren’t exactly new revelations about Apple’s business model. Apple is never going to let itself be associated with terms like “cheap,” “discount” or “low-cost,” and it’s especially not going to describe one of its products that way. Apple strives to portray itself as the maker of super-high quality hardware, even when offering discounts. A good example is when Apple lowered the price of the Apple TV from $299 to $99 in 2010. While Apple did make it cheaper, that’s not the way Steve Jobs phrased it. Instead, he said they lowered the price by $200 because “users said they’d like to see it more affordable.”

And to Schiller’s second comment, Apple can always make a more affordable or cheaper iPhone without it becoming “the future of Apple’s products.” Instead, it would be just one option offered to buyers — like the $49 iPod Shuffle in the same lineup as the iPod nano and iPod touch. It’s not for everyone, and generates far less volume than its siblings, but it’s at least an option for customers who may not have bought into the iTunes ecosystem any other way.

Again, this is still a rumor. Schiller’s words have left plenty of wiggle room.

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  1. Right along there with “we’ll never make ‘mini’ tablets” or larger-display phones.

    In Schiller’s defense, he is the SVP of Marketing after all. It’s his job to sugar-coat everything :)

  2. The new iPhone will have to be better than those new Youm Samsung phones with flexible o-led screens.

  3. “[E]very product that Apple creates, we consider using only the best technology available.”

    Why then does the iPad mini have a low resolution display?

  4. saidimu apale Friday, January 11, 2013

    Important to note that Reuters has withdrawn their earlier article on this issue: http://www.reuters.com/article/2013/01/11/us-apple-iphone-idUSBRE9091CR20130111?feedType=RSS&feedName=technologyNews

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