Former Apple CEO Says Cheap iPhone Is Needed

If you ask current Apple management about the release of a cheap iPhone, you will hear explanations that it’s not in the company’s interest to gain market share or to woo buyers on a budget. On the other side, John Sculley, former Apple CEO says the cheap iPhone is definitely needed for the company’s evolution, particularly when developing markets are so interested in popular smartphones for a bargain price.

A few days ago, Apple management exec Phil Schiller was explaining in an interview with a Shanghai news outlet that it’s not in the company’s interest to bet on cheap devices, because that’s not what Apple does. However, Bloomberg talked with former Apple CEO John Sculley about the cheap iPhone release and the answer was a definite “yes” for the company’s evolution in developing regions.

Apple has millions of mignons in the United States, but in emerging economies, oftentimes the price tag is not affordable for a similar number of customers. Just look at the tablet market, where budget products released by Amazon and Google have appealed to buyers a lot more than the expensive iPad, despite the difference in tech specs, display quality and app potential.

“As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably” former Apple CEO John Sculley told Bloomberg Television in an interview in Singapore. "Apple needs to adapt to a very different world" he added.

Over the past few months, Apple has been losing ground in favor of more affordable brands, like Samsung, which has been recording raving sales in the emerging economies the cheap iPhone should target. And while Apple is pricing so high its devices, the technology they feature is getting more and more affordable, that even budget smartphones are closing the gap.

“Samsung is an extraordinarily good competitor. The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see” Sculley added.