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Apple CEO hints at cheap iPhone

iPhone 5

By Dave Stevenson

Posted on 13 Feb 2013 at 11:35

Apple CEO Tim Cook has hinted at the development of a cheap iPhone.

He didn't deny that the iPhone was too expensive to those looking for pay-as-you-go ownership, adding "we are making moves to make things more affordable", in a keynote speech at Goldman Sachs’ Technology and Internet Conference in San Francisco.

However, Cook claimed Apple was unwilling to compromise quality in order to hit price points. Instead he pointed to instances where the company has developed new products to reach consumers wanting to spend less.

On the drive to create a cheaper Mac he said, "we concluded we couldn’t do a great product, but what did we do? We invented iPad."

He also compared the drive to create a cheaper iPhone to the development of the iPod Shuffle. "Instead of saying, ‘how can we cheapen this iPod to get it lower?’, we said, ‘how can we do a great product?’, and we were able to do that."

While Cook didn't drop any more specific hints about future products, his outlines for the future could be designed to ease recent shareholder unrest.

Hedge fund manager David Einhorn is suing Apple to get the company to release some of its formidable cash pile to investors. Apple has nearly £90 billion on hand. The lawsuit comes at a time of choppy trading for Apple, whose share price has fallen since September to $470 per share from a high of over $700.

Cook called the lawsuit "a waste of shareholder money and a distraction", calling Einhorn’s legal move "silly".

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User comments

"Apple has nearly £90 million on hand"

Are you talking about their total cash reserves or what they have put aside to deal with this?


A cheap iphone would be a mistake. It would temporarily increase their market share but in the long run would undermine the whole idea of iproducts being aspirational. Once it loses that lustre, it loses its main selling point. I know the ipad mini is dipping a toe in these waters but it’s still ridiculously expensive for what it is.

By JamesD29 on 13 Feb 2013

Cheap is a slippery slope.

JamesD29 is right - being expensive is part of Apple's branding and allure.

Being able to pick up a £99 iPhone while doing your shopping at Lidls will destroy the brand long term.

By cyberindie on 13 Feb 2013

On the other hand, by introducing a cheap iPhone they may be able to hold back Android/WP/etc. while also sell more through other services e.g. iTunes, App Store, etc.

I doubt they will introduce a £99 Lidl's model though, probably looking at the £200-300 mark and probably replace the current low-mid range devices (4 and 4s) which could also make production cheaper/easier.

By tech3475 on 13 Feb 2013

2 points

1) Isn't it 90 billion, not 90 million?

2) Don't they have a cheap iPhone widely available now? It's called the 4S...

By nicfaz on 13 Feb 2013

@tech3475

Support old models would accompish the same thing. Remember that apple makes all its money with the most profitable part of the market. Revenue per user will drop if they do this.

By JamesD29 on 13 Feb 2013

@tech3475

What you're saying applies more to Microsoft than apple.

By JamesD29 on 13 Feb 2013

BILLION!

Shoddy proof reading skills on display again - that's £90 Billion, not £90 million. You only got that wrong by a magnitude of 10^3!

By SwissMac on 13 Feb 2013

Thanks to those pointing out the million/billion slip-up, duly corrected.

By davethelimey on 13 Feb 2013

@JamesD29

Yes and No, It depends on what a 'low end' phone looks like and as I said it they also make money from exclusive services e.g. the App store from which having a larger market share does help and could possibly prevent people from leaving it in the future to rivals.

Currently AFAIK they have to make two different CPUs and two different PCBs where as a single replacement model could lower the price per unit (for Apple) since only one base unit has to be made (maybe adding or removing storage).

What I've said is all theoretical and is just another side to the coin. They may even release one just to please stock holders for all I know.

By tech3475 on 13 Feb 2013

Be Nice If Smart Phones Were SMARTER

Back about 8 years ago phones did speaker dependant dialling, however smart phone are now too dim to manage this amazing feat. Why can I not get the only feature I need to go with hands free?

By Jonesr18 on 13 Feb 2013

Apple makes money on the hardware, the software is just to keep the punters coming (which is the opposite of how it works for android).

By JamesD29 on 13 Feb 2013

Large numbers.

Hey SwissMac, that's a pretty large discrepancy you are accusing Dave of.

3! = 3x2x1 = 6

By synaptic_fire on 13 Feb 2013

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