Earlier this week, a rumor emerged saying that Apple was planning on introducing a cheaper iPhone into emerging markets. How cheap? Another rumor speculated that it could be as cheap as $99. The phone would obviously be intended for emerging markets where cheap smartphones are much more popular, but would Apple really go against years of creating expensive, luxury devices? Apple’s Phil Schiller gives a resounding no.
During an interview with Chinese newspaper Shanghai Evening News, Schiller said that Apple has no plans in regards to a cheaper iPhone. He admits that “cheap smartphones are more popular” in China than the once popular “non-smartphones,” but says that “will never be the future of Apple’s products.” He goes on to say that the company’s position in China is quite comfy because they own 75 percent of the profit despite only owning 20 percent of the smartphone market.
So, what’s up with all the rumors of a cheap iPhone then? Not only is Digitimes reporting on the device, but Bloomberg and the Wall Street Journal both received reports from those close to Apple who confirmed the device as being real. Could they all be wrong? Of course they could, but these kinds of rumors have a way of at least being partially true.
Regardless, Apple needs to focus on these emerging markets. They may own 75 percent of the profit in China, but I would wager those are only hardware sales. Software sales count in the long run, and Apple needs to capture more of the market share to tap into this lucrative revenue stream. It doesn’t necessarily have to be $99, but how can Apple hope to penetrate emerging markets, like Brazil, when its flagship product costs the equivalent of $1,145.[h/t: The Next Web]