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TMCNet: Apple scotches cheaper iPhone rumours

[January 11, 2013]

Apple scotches cheaper iPhone rumours

(Guardian Web Via Acquire Media NewsEdge) Rumours of a forthcoming cheaper iPhone are false, Apple's marketing chief has told Chinese media.

In Apple's first interviews with Chinese media, senior vice-president of marketing Phil Schiller told the Shanghai Evening News that Apple is not planning "cheap smart phones to grab market share".

"iPhone 5 is the best phone for Apple," he said. "Market share is not a concern for Apple ... Apple is proud to create great products and market share is just a by-product." Industry speculation has persisted since early 2011 about a smaller, cheaper iPhone designed for mid-market buyers, and rumours intensified with the release of the iPad Mini – effectively a smaller, cheaper iPad – in November last year.

Earlier this week, the Wall Street Journal claimed that Apple was concerned about the increasing dominance of Android-powered handsets in the smartphone market.

The Wall Street Journal reported that the new handset would be launched in late 2013, modelled on the current iPhone but with less expensive components including a polycarbonate body or recycled elements of previous iPhones.

However, market analysts Enders has found that Android has increased its market share at the expense of Nokia, Blackberry producer RIM and featurephone sales, rather than iPhone. Apple dominates the premium smartphone market and has maintained a 20% market share, according to analyst Ben Evans, who says regardless of market share the business is extremely profitable, with $176bn in the bank and expected sales of 113m iPhones in 2013.

A cheaper iPhone would generate smaller margins for Apple, but could also attract a new customer base.

Schiller and Apple chief executive Tim Cook are in China to promote the company's products. The country accounted for 15% of Apple's revenues last year, has 11 stores and is on track to overtake the US as its largest market, Cook has said.

(c) 2013 Guardian Newspapers Limited.

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