Seeking Alpha

"Despite the popularity of cheap smartphones, this will never be the future of Apple’s...

"Despite the popularity of cheap smartphones, this will never be the future of Apple’s (AAPL -0.1%) products," says SVP Phil Schiller in an interview with a Chinese paper. He adds that in "every product that Apple creates, we consider using only the best technology available." The remarks throw cold water on reports of a cheaper iPhone featuring less costly materials, and particularly on a Bloomberg report that Apple is considering retail prices of just $99-$149 for the device. Update: The interview's text has been significantly revised.
From other sites
Comments (47)
  • bobbobwhite
    , contributor
    Comments (1974) | Send Message
     
    A cheap smartphone is the other phone maker's world, not Apple. Can't see it ever happening. Combo iPhone and iPad, yes, in 2013.
    10 Jan 2013, 02:22 PM Reply Like
  • Danny1929
    , contributor
    Comments (93) | Send Message
     
    It isn't Apple's world as long as the spirit of Steve Jobs haunts the hallways of One Infinite Loop
    10 Jan 2013, 05:00 PM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    Oh it's going to happen, as for apple using the best tech possible i would say none of their devices have the top available tech. Lagging behind along with every maker :) Guess they need a lag to keep popping out new phones every couple of months.
    10 Jan 2013, 02:36 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4085) | Send Message
     
    What a non sense. The operating system alone is better than the Android crap.
    10 Jan 2013, 02:40 PM Reply Like
  • danzada
    , contributor
    Comments (136) | Send Message
     
    Have you ever worked for a tech company? I have, and the sheer speed with which AAPL churns out new top of the line gadgets is mind-boggling. They will always have the best tech feasible for the current generation.
    10 Jan 2013, 03:03 PM Reply Like
  • Cynical Rhino
    , contributor
    Comments (167) | Send Message
     
    "Have you ever worked for a tech company? I have, and the sheer speed with which AAPL churns out new top of the line gadgets is mind-boggling. They will always have the best tech feasible for the current generation." -- danzada

     

    Apple has very good style, packaging and reliability but has historically had significant technology gaps. The original iPods had poorer batteries and lower audio fidelity. Airbooks are sleek and cool, but are always at least a year behind competing products for power and function.

     

    Apple is much more about integrated ecosystems and status. They are the technology equivalent of the cool kids at school. Everyone wants to be in the clique but that doesn't mean they are the best students. They don't try compete on performance metrics or value. They don't try to give people what they want, Apple tells people what they should want, and, with a few embarrassing missteps, they usually get away with it. (Anyone think consumers wouldn't prefer an SD card port on their new iPad)?
    10 Jan 2013, 04:02 PM Reply Like
  • Dagger55555
    , contributor
    Comments (53) | Send Message
     
    Mini is the best available, really?
    Of course, that wasn't going to happen either.
    10 Jan 2013, 04:35 PM Reply Like
  • Matsebula
    , contributor
    Comments (52) | Send Message
     
    People want easy to use, smooth interface, etc. The average person cares less about what is under the hood as long as doing what they want to do is simple and smooth. And, the design is very appealing.

     

    I used to think Apple was about cool. Not anymore. USAF pilots don't care about cool, they just want their flight manuals, which are now on iPads.
    10 Jan 2013, 05:00 PM Reply Like
  • Danny1929
    , contributor
    Comments (93) | Send Message
     
    I work in tech. Big nod to you on this one, sir. It's phenomenal what these high-tech companies do every quarter. I'm saying that about Apple and Samsung and all the rest too.
    10 Jan 2013, 05:01 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    Cynical Rhino said: "They don't try to give people what they want, Apple tells people what they should want, and, with a few embarrassing missteps, they usually get away with it. (Anyone think consumers wouldn't prefer an SD card port on their new iPad)?"

     

    You can view Apple that way, sure, but you can also look at it another way: Apple is ahead of the curve and may be seen as causing evolutionary change. An example would be not including an SD or any other ports on their portable devices (harkens back to the early days of Apple, when Wozniak wanted to allow users to customize their Apple computers). In Apples world, SD cards are already obsolete. Photo Stream, iCloud, etc. make the need for physical data storage yesterday's news. You can buy a card for your digital camera that automatically uploads your photos to the cloud - right from your camera.

     

    The newest iteration of iMacs don't come with an optical drive of any kind. Will people turn away from that? Some will, but I believe we'll see a spike in iMac sales, as people will simply learn to adapt to Apple's environment. They wouldn't do this if they had to sacrifice anything meaningful, by the way.

     

    Apple isn't for everybody, and they aren't trying to say they are, but they haven't strayed from their goal of controlling the user experience, and for an increasingly large number of users, that's just fine with them.
    10 Jan 2013, 05:28 PM Reply Like
  • lordmorgul
    , contributor
    Comments (39) | Send Message
     
    Apple doesn't leave out SD cards and Optical Drives and add brand new interfaces such as IEEE1394 just to annoy people... they push trends forward looking to when SD cards and Optical Drives are pointless since all your data is flowing from a cloud anyway. You might disagree on whether you want it there... but its not because they are cheap and behind technologically... Most PCs still had optional 3.5" disk drives at the time Apple decided it was time to abandon the CD.
    10 Jan 2013, 11:21 PM Reply Like
  • Sempre007
    , contributor
    Comment (1) | Send Message
     
    People vote with their pocketbooks, so......you can babble all you want, whose products make the most profit and whose products top customer service surveys across the board? I'll wait.........

     

    Techno nerds will always talk bits, bytes, mega this and that...but consumers just want gagets that work, don't require volumes of user manuals and "surprise" us with their ease of use. When Apple stops delivering, its faithful will start shopping elsewhere. Problem is, as Rocco so ably points out, where do they go?
    11 Jan 2013, 02:29 AM Reply Like
  • Cynical Rhino
    , contributor
    Comments (167) | Send Message
     
    "In Apples world, SD cards are already obsolete. Photo Stream, iCloud, etc. make the need for physical data storage yesterday's news. You can buy a card for your digital camera that automatically uploads your photos to the cloud - right from your camera."

     

    and

     

    " Apple doesn't leave out SD cards and Optical Drives and add brand new interfaces such as IEEE1394 just to annoy people... they push trends forward looking to when SD cards and Optical Drives are pointless since all your data is flowing from a cloud anyway."

     

    Apple doesn't believe flash storage is obsolete or pointless They just don't think they can charge $200 for an SD card port and they can to upgrade from a 16GB to 64GB iPad.
    11 Jan 2013, 04:10 PM Reply Like
  • Eric Dee
    , contributor
    Comments (1191) | Send Message
     
    @dusk920,
    "Guess they need a lag popping out new phones every couple of months."

     

    You of course are joking if what you are referring to is anything AAPL coming out every 2 months.
    18 Jan 2013, 02:04 PM Reply Like
  • Eric Dee
    , contributor
    Comments (1191) | Send Message
     
    This article should put to rest any ridiculous and ludicrous suppositions remaining. Since when did AAPL go from a leader in the entertainment business to a loss leader with the introduction of new product?
    10 Jan 2013, 02:38 PM Reply Like
  • 1509alpha
    , contributor
    Comments (36) | Send Message
     
    Ready W.S., not you can sell AAPL because it will not have the cheap phone because yesterday you sold it because will.
    10 Jan 2013, 02:38 PM Reply Like
  • berylrb
    , contributor
    Comments (2205) | Send Message
     
    Too funny, yep that strategy didn't work too well, selling on a negative rumor that wasn't.
    10 Jan 2013, 02:50 PM Reply Like
  • JUDOKA
    , contributor
    Comments (406) | Send Message
     
    Apple's success has always been to follow the Jobs axio;Make a quality product that people will pay up for and make part of their lives.Let the others prostitute themselves.The last line is not part of the axiom.
    10 Jan 2013, 02:46 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    Good for Apple for dispelling the rumour.

     

    Of course, you'll note that Schiller does not say that Apple won't be pursuing the segment of the market that is currently being serviced by "cheap" smartphones...
    10 Jan 2013, 02:47 PM Reply Like
  • berylrb
    , contributor
    Comments (2205) | Send Message
     
    totally it only makes sense to pursue the unsubsidized Chinese market but not at the cost of producing a low-quality phone.
    10 Jan 2013, 02:52 PM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    lol really tell me the specs and compare with others and tell me what is ahead of the curve ? i challenge any of you to produce actual information rather than opinion. I base my opinion on facts not people's feelings. Specs speak for themselves iphone a5 chip newest chip = a15 :) that is my basis for my comment. As far as quality apple products break easily and are not much better than their competition. What apple has done is create an image of the best that a bunch of snobs line up to buy.
    10 Jan 2013, 03:20 PM Reply Like
  • Jeramy41
    , contributor
    Comments (78) | Send Message
     
    That's funny dusk. Try one, you'll like it.
    10 Jan 2013, 03:27 PM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    i have i like my galaxy :) basically the same thing.
    10 Jan 2013, 03:33 PM Reply Like
  • ManoLive
    , contributor
    Comments (437) | Send Message
     
    Hey, Dusk. Buy a comma.
    10 Jan 2013, 03:40 PM Reply Like
  • rrosey2
    , contributor
    Comments (699) | Send Message
     
    Apple will have great economy producing the "poor man's Rolls Royce", a stripped down low cost high efficiency no-frills gem. They can do it.
    10 Jan 2013, 03:42 PM Reply Like
  • Michael2343
    , contributor
    Comments (457) | Send Message
     
    Not true, Apple does occasionally make cheaper products, and they are poorly received, now they are forced to produce them to stay afloat against Android and Nokia, Amazon and Google, Sony and Samsung. They have no choice, losing market share, losing users who are flocking to other, richer "ecosystems".

     

    Apple has bucked the trend for a long time by holding price premiums of 2x on products that are only slightly better. That means for every advancement the competition makes Apple loses big time.
    10 Jan 2013, 04:26 PM Reply Like
  • pfbsurf
    , contributor
    Comments (142) | Send Message
     
    move up in the stock mid day was on interesting volume, with a gap up from 517.. Thats not the retail guy making those bets.

     

    This will make it the fourth bounce off of the 510 or so level, with higher lows over the last month. that 500+ support level is a real battle, but my guess is that the bears are getting a bit tired. 4 months of selling with very little respite on rumor and speculation, for a stock that is trading at 9X earnings or so (ex cash)... Way oversold.
    10 Jan 2013, 04:52 PM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    lol apple has 125$ so called cash per share but really it has less as alot of that cash is invested in other stuff. It been off 505 not 510 level that it has been bouncing twice now and once off 501. First bounce up to 580 second bounce to 535 and back to 510 back to 550 now back down again. The sell off started at 705 to 500 which is almost 30% i think the bears had a feast "_". Anyhow valuation is a useless metric fundamentals trump technicals. Anyways apple needs to beat earnings estimates to turn it around and it probably will do so when it reports which will make the stock rally again.
    10 Jan 2013, 05:46 PM Reply Like
  • madbcolumbus
    , contributor
    Comments (124) | Send Message
     
    i'm glad Phil came out to kill the rumor of a low price iphone. maybe aapl felt the heat from yesterday's selloff of the stock and thought there would be a possibility of the stock dipping under 500 by friday.
    10 Jan 2013, 06:26 PM Reply Like
  • Destin
    , contributor
    Comments (472) | Send Message
     
    I think the strategy of using outgoing models as a base/budget model is a good one. My "new" iPhone 4 is light years beyond my old cheap base model Android phone.
    10 Jan 2013, 07:28 PM Reply Like
  • Tusc
    , contributor
    Comments (277) | Send Message
     
    Yes , I agree. I frequently allude to the automobile makers which produce premium brands at all price points.Take for example the Porsche Boxter, a lower priced premium product, that not only captures plenty of sales, but plenty of profit. Also, it was panned by many as heresy, and the death of Porsche.
    11 Jan 2013, 02:30 PM Reply Like
  • racchole
    , contributor
    Comments (336) | Send Message
     
    Apple $400 here we come!
    10 Jan 2013, 08:21 PM Reply Like
  • jmjp
    , contributor
    Comments (4) | Send Message
     
    Apple losing its cool with adoption by declassé, its profit niche is all about best TECHNOLOGY with best-VALUE hardware, not best-QUALITY hardware. And extorting $$ bigtime for add-ons. Man do they soak you for add-ons.
    11 Jan 2013, 12:19 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "best-VALUE hardware, not best-QUALITY hardware."

     

    then that is what the "Genius Bar" is for, to have superb After-Sales Service.

     

    I have been slighted by Best Buy (bunch of Geek-incompetents even with an extended warrantee), Toshiba ...

     

    Apple kool-aid goes down well, where others leave a most bitter lingering after-taste ...
    12 Jan 2013, 05:37 AM Reply Like
  • kimboslice
    , contributor
    Comments (1501) | Send Message
     
    Go into an Apple store and tell me their stuff is not better than the windows or android stuff.
    The only non-Apple product I like is the nexus 7. But, the iPad mini is nicer.
    Apple doesn't care what analysts think, what stock traders and hedge fund managers think, or anything else. Apple just makes stuff they like to make.
    Apple products are not expensive, they just cost more than some people can afford ;)
    11 Jan 2013, 02:50 AM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "cost more than some people can afford"

     

    [non-Apple users] the additional expense(s) would be transferred, if not an IT dude (-tte), go to System Administration and other tweeks.
    19 Jan 2013, 05:58 AM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    @kimboslice so what spec does it have that is better lol ? or feature ?
    siri ? because its about the same thing as the other voice recongnition software made out to be super awesome. Just the same, there is nothing really better about it in my view just my humble opinion.
    11 Jan 2013, 09:39 AM Reply Like
  • dusk920
    , contributor
    Comments (70) | Send Message
     
    In fact the galaxy has something that the iphone does not now :) which is the automatic transfer between the phones of content. Which is a good thing :) i would say apple is now starting to fall behind, that being said i am a buyer of the stock right here ahead of earnings i am just saying that its not what people make it out to be.
    11 Jan 2013, 03:09 PM Reply Like
  • berylrb
    , contributor
    Comments (2205) | Send Message
     
    @dusk, exactly how does that work? The reason I ask is that I've been using the app Bump on my iPhone since the 3G model I believe. It is just three clicks:
    1. open app
    2. swipe to choose photo, file or contact
    3. select to photo, file or contact
    4. Bump

     

    What is different with Android? I imagine one still has to use these steps, with the exception of #1, maybe the app is always on, but that would drain the battery eh? Anywho, I can't imagine that Android can read a users mind so you'd think that even Android users have to use steps #2-4, eh, at least #4!
    12 Jan 2013, 04:01 PM Reply Like
  • sduris
    , contributor
    Comments (557) | Send Message
     
    The ipad mini wasn't in Apple's future either, but it happened. Tablet wasn't in Apple's future when SJ originally said it. So, I pay little attention to words. Apple can do best to stick by its guns on focusing on the user experience. If they do that then we'll know if a cheaper version of the iphone is really in its future. By the way, SJ said that there is no yacht in his future - he was metaphor'g at the time, but I have seen that huge monstrosity. Just sayin.
    14 Jan 2013, 12:47 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    "Tablet wasn't in Apple's future when SJ originally said it. "

     

    Ipod touch 4gen 2010-- how is this different from an mini-tablet or rather iphone w/o cellular.
    14 Jan 2013, 08:35 PM Reply Like
  • sduris
    , contributor
    Comments (557) | Send Message
     
    I don't understand your point if there is one. My point is that AAPL has said things and have changed their mind.
    14 Jan 2013, 09:06 PM Reply Like
  • scott trader
    , contributor
    Comments (4847) | Send Message
     
    I have learned to never say never, eventually bites you in the butt ....
    14 Jan 2013, 09:56 PM Reply Like
  • sduris
    , contributor
    Comments (557) | Send Message
     
    That is true, ST. But even if you do, there is always a way to spin.
    15 Jan 2013, 11:26 AM Reply Like
  • Eric Dee
    , contributor
    Comments (1191) | Send Message
     
    I have no marks yet ST.
    18 Jan 2013, 01:56 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    http://n.pr/UyEj8r

     

    As Developing World Goes Mobile, Can Apple Make The Sale?
    by STEVE HENN
    January 28, 2013 3:14 PM
    28 Jan 2013, 09:22 PM Reply Like
  • Sam Liu
    , contributor
    Comments (3864) | Send Message
     
    " Update: The interview's text has been significantly revised."

     

    How does this affect the message of the article.
    29 Jan 2013, 05:15 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector