Phil Schiller: Cheap Products Not the Future of Apple – Updated

phil schiller

UpdateReuters made the call to pull their original article, citing major changes to the original piece by the Shanghai Evening News. Those changes including rewording of the parts relevant to the news reported. Those changes also affect this article. Reuters then pushed an update to their article, stating the following reasons for their article being pulled:

[I]n a new version of the story published after the original, the Shanghai Evening News removed all references to cheaper smartphones, except for a mention of a “cheaper, low-end product.” It also amended its original headline from “Apple will not push a cheaper smartphone for the sake of market share,” to “Apple wants to provide the best products, will not blindly pursue market share.”

Apple confirmed the interview had taken place and that it had contacted the Chinese newspaper about amending its original article, but had no further comment and declined to provide a transcript of the interview.

This should really come as a surprise to absolutely no one out there, but it is worth sharing. Apple, the company defined for much of its life as a more premium manufacturer than its competitors (both in terms of quality and in price), will not become just another cheap supplier of electronics. That message comes by way of Phil Schiller, Apple’s Senior Vice President of Worldwide Marketing, who is widely regarded as Apple’s second-in-command.

In an interview that The Next Web has confirmed with Apple as being official, the Shanghai Evening News managed to report on the following tidbit:

Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit.

Apple’s domination of the share of profit has been widely reported as their market share has taken a back seat to that of Android. A huge portion of Android sales are in incredibly cheap and low-powered devices. Devices like the Galaxy S III and HTC One X sell well, but pale in comparison to the deluge of cheap devices being sold and produced in countries like China and Brazil. Those devices fuel the rapid growth of Android.

Since their main feature is their low price, Apple can’t compete with those devices as well as one might wish. This has resulted in Apple’s marketshare being diminished over time. The Wall Street Journal reported two days ago that Apple would be releasing a cheaper iPhone to satiate this demand. Given this interview, that report now seems even more questionable than it previously was.

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