Former Apple CEO John Sculley appeared on Bloomberg yesterday to speak about the potential for Apple to fall from grace, as their current stock price slide would suggest. Sculley suggested that Apple had “reached saturation” in the developed markets (e.g. the US and Europe) and would instead need to focus its attention on reaching the emerging markets with lower cost products.
He supported current CEO Tim Cook, calling him the “world’s greatest expert” on supply chains – and made the point that Cook would have to use that expert knowledge in order to drive down costs across the board to allow Apple to compete with $100 smartphones being produced by its rivals, specifically Samsung. Calling Samsung “an aggressive competitor”, he underscored the need for Apple to produce smartphones that would be at a price point that would be affordable for the middle class in emerging markets.
All of this lends credence to recent rumours of a low-cost iPhone available globally. The new iPhone is expected to include a plastic back – as was the case for the iPhone 3GS – and potentially metal internal components visible from outside. This new, cheaper iPhone may be released in the second half of 2013.
Such a phone would be significantly different in price and appearance to the current flagship iPhone 5, but would still be able to deliver a compelling experience on the back of the iOS operating system. That vertical integration is key to Apple’s success at lower price points, and Samsung’s own command of the principle has allowed them to make times very difficult for rivals like HTC and Nokia.
So, what do you think of the news – will Apple really produce a low-cost iPhone, or will they stick to their premium ways? Let us know in the comments below!