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  • Apple's Executives Speak Out About Cheaper Smartphones and Discuss the Company's Stance


    After facing criticism over higher-than-expected pricing of the new iPhone 5C, Apple CEO Tim Cook has defended the company’s strategy, saying there’s plenty of room to grow and retain its profits in the high-end handset market. Following the introduction of the company’s mid-range iPhone 5C and flagship iPhone 5S, Cook was joined by Apple Design Chief, Jony Ive and Head of Software, Craig Federighi in speaking with Bloomberg for its latest cover story. The three executives exude confidence in the interview with Cook saying that his company’s share price doesn’t affect his mood.

    Cook noted that the trend toward cheaper electronics isn’t a new one, having occurred previously with VCRs, DVD players, cameras and even PCs. Now it seems to be occurring again with tablets and smartphones with Cook saying he doesn’t feel compelled to take Apple down that same path. He mentioned the following regarding the topic:

    There's always a large junk part of the market. We're not in the junk business.
    Instead, Cook said he would prefer to “compete like crazy” for customers who want premium devices that meet their needs. He continued by saying he won’t “lose sleep” over cheaper electronics, because those kinds of devices simply aren’t in Apple’s DNA. Cook mentioned the following regarding the topic:

    Fortunately, both of these markets are so big, and there's so many people that care and want a great experience from their phone or tablet, that Apple can have a really good business.
    Before its announcement, observers thought the iPhone 5C might become a more affordable option in the company’s smartphone lineup. Analysts presumed that Apple might price the device around $400 without a contract subsidy, helping increase sales in emerging markets such as China, India and Brazil. Instead, the iPhone 5C was introduced as Apple’s new mid-range handset available for $99 with a new two-year service contract, or $549 without a carrier subsidy. This price, along with the fact that Apple didn’t announce any pre-order figures for the iPhone 5C this week sent the company stock tumbling.

    In his response, Cook said his company never had any interest in selling a low-cost iPhone. Instead, he said the purpose of the iPhone 5C was to offer a “great phone and provide a great experience” at a lower cost than the flagship iPhone 5S.

    Both Federighi and Ive who were also featured in the exclusive Bloomberg interview revealed that their desks at Apple are a one-minute walk away from one another. Both executives were assigned larger roles in the company last year as part of a corporate shakeup that was designed to increase collaboration among the company’s different departments. Ive stressed how Apple spends a great deal of time focusing on the smallest of details, which is something that consumers end up appreciating when they purchase a premium product, rather than cheap alternative. According to Ive:

    I do think that we sense when somebody has cared. And one thing that is incontrovertible is how much we've cared.
    If you’re interested in reading the full interview, you can do so by hitting the source link below.

    Source: Bloomberg
    This article was originally published in forum thread: Apple's Executives Speak Out About Cheaper Smartphones and Discuss the Company's Stance started by Akshay Masand View original post
    Comments 22 Comments
    1. steve-z17's Avatar
      steve-z17 -
      I feel like Steve would have said the same thing, they're not in the junk making business. All they want to do is make great devices for consumers to enjoy. I agree with what was said about the little details making a difference, it's one of the things I love about iOS.
    1. ThuD Muffin's Avatar
      ThuD Muffin -
      Quote Originally Posted by steve-z17 View Post
      I feel like Steve would have said the same thing, they're not in the junk making business. All they want to do is make great devices for consumers to enjoy. I agree with what was about the little details making a difference, it's one of the things I love about iOS.
      This + Steve probably would have called out which ones he thinks are junk!
    1. Mohitster's Avatar
      Mohitster -
      Quote Originally Posted by steve-z17 View Post
      I feel like Steve would have said the same thing, they're not in the junk making business. All they want to do is make great devices for consumers to enjoy. I agree with what was about the little details making a difference, it's one of the things I love about iOS.
      Only problem with that is devices like Nexus 7 Tablet are not exactly junk quality and still priced cheap .. and that's where these junk statements about "what you are not willing to do and why" sucks big time. Bull. ****.
    1. cpotoso's Avatar
      cpotoso -
      History is full of failed companies that did not realize that the competition coming from the bottom would eventually overtake them. Read "When Giants Fail" at Clayton Christensen’s Disruptive Innovation : The New Yorker.
    1. JeremiahSantos's Avatar
      JeremiahSantos -
      i am fully agree with the Apple administrators as the Apple is a brand meant for making exclusive communication and other devices .. not the cheap and copied one
    1. smith01's Avatar
      smith01 -
      Their loss.
      Everyone loves cheap things as they can afford them. So if Apple dont want part of that market its their loss. Samsung have their hands in that market and they make lots of money from it. Samsung have their hands in all the markets, the cheap, the middle and the premium so they will be making a lot more money and keep a lot more people happy.
    1. docmagoo2's Avatar
      docmagoo2 -
      Haven't you seen the trend tho? Apple products are always expensive yet people buy them! In terms of quality (both build and customer service) they're 2nd to none. If you want a cheap smart phone go with Samsung, that's your choice and cry when it breaks. I have and always will prefer an exclusive premium service over an okay service
    1. dsg's Avatar
      dsg -
      the iPhone 5C is junk, come on its a repackaged iPhone 5 with a cheaper body to reduce production cost and yet they charge a premium. people will buy it, but it isn't worth half the price there asking for it

      I'm not impressed with the route the heads of Apple are taking, I have come to expect quality from them and I feel they have failed with this piece of **** called the iPhone 5C

      Edit: it would have been better if they'd just carried on selling the iPhone 5 at a lower price point
    1. Ambi_Valence's Avatar
      Ambi_Valence -
      Why do Apple staff always look so 'douchey'.
      Only Tim looks half normal above. Jony Ive ALWAYS looks and sounds forced and unnatural in whatever he does.
    1. danman2_2999's Avatar
      danman2_2999 -
      Yeah I agree that the staff all has a certain "look" to them. I like iPhone but hate Apple.
    1. Ambi_Valence's Avatar
      Ambi_Valence -
      I'm not so sure I'd go that far but Ive and his ilk do not sell products to me, the products themselves are what make me buy them.
    1. luvmytj's Avatar
      luvmytj -
      It's the same reason you don't see low cost "entry level" Mercedes Benz.
      There is always a premium to pay for a well designed and built quality item.
    1. iPhoneThereforeIAm's Avatar
      iPhoneThereforeIAm -
      What's with all the 5C hate ?
      People never stopped b*tching about the i-5's glass back breaking.
      I'm of a practical disposition and would much rather have a robust housing.
      Why are people so hung up about looking all ghey and fem with their phones ?
      I just bought a Nokia Lumia 920 - indestructible AND beautiful ... with a great camera - something that can take the daily rough and tumble of being a pocket camera.
    1. Jato_BZ's Avatar
      Jato_BZ -
      Quote Originally Posted by dsg View Post
      the iPhone 5C is junk, come on its a repackaged iPhone 5 with a cheaper body to reduce production cost and yet they charge a premium. people will buy it, but it isn't worth half the price there asking for it

      I'm not impressed with the route the heads of Apple are taking, I have come to expect quality from them and I feel they have failed with this piece of **** called the iPhone 5C

      Edit: it would have been better if they'd just carried on selling the iPhone 5 at a lower price point
      +1 I love my i5! Now I'm either forced to get a 5C as a replacement if this was to be replaced??!! Or a 5S? That Touch ID can go where the sun don't shine!

      BS!!

      Should have made the 5C replace the 4S at that price AND kept the original 5 in service.i felt like they got it right & were moving in the right direction with the iPhone5...

      :-/
    1. Venom1234's Avatar
      Venom1234 -
      Quote Originally Posted by Jato_BZ View Post
      +1 I love my i5! Now I'm either forced to get a 5C as a replacement if this was to be replaced??!! Or a 5S? That Touch ID can go where the sun don't shine!

      BS!!

      Should have made the 5C replace the 4S at that price AND kept the original 5 in service.i felt like they got it right & were moving in the right direction with the iPhone5...

      :-/
      Forward thinking, more like backwards thinking.
    1. Mohitster's Avatar
      Mohitster -
      Problem with this whole thread and Apple is that they somehow believe that quality "always" equates the price of a device. Which is definitely not true. Even cheaper devices excel in quality if done right.
    1. recognition's Avatar
      recognition -
      Quote Originally Posted by cpotoso View Post
      History is full of failed companies that did not realize that the competition coming from the bottom would eventually overtake them. Read "When Giants Fail" at Clayton Christensen’s Disruptive Innovation : The New Yorker.
      You mean like Apple coming from the bottom of the phone market 6 years ago, to eventually becoming one of the most popular phone manufacturers?
    1. fleurya's Avatar
      fleurya -
      I tend to agree. Apple has never been a market share chaser. They have done very well for years in computers with a very small niche market share. You don’t have to be all things to all people to be successful and profitable. Some earlier said that eventually the bottom will swallow you up. Well, that hasn’t happened to Apple and tons of other companies that sell products are a premium price, whether or not it’s really worth it (Starbucks, any premium clothing brand, etc)

      When they said the 5C would be a budget model, I thought it could be a major shift in Apple’s business model since Steve left, but when they said it was the 5 repackaged, I knew what the price would be on contract: the same it would have been if they left the model exactly the same. Wall Street reacted badly because that’s what they do when wild guesses that are baseless don’t pan out, but it doesn’t change the business that stock belongs to.

      Google can have the majority market share. They can have 90%. And all the insecure Android fans should belch it out with pride, but just because Mercedes doesn’t sell as many cars as Toyota doesn’t make them unsuccessful. And Apple and Apple will just keep laughing to the bank with their billions on revenue.
    1. steve-z17's Avatar
      steve-z17 -
      Samsung and other device making companies have to make multiple devices per year to generate all that revenue; Apple focuses on making one great device every year and they make tons of money off it. If Samsung had been making just one device per year like Apple, I guarantee they would be no where near Apple's level and they wouldn't be selling it so cheap!
    1. Nuff Said's Avatar
      Nuff Said -
      I guess everyone forgot when apple reps shot down the idea of a cheaply made iPhone long before the press release?