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  • Former Apple CEO: Apple Needs to Overhaul Supply Chain to Reduce Cost of iPhone
    by
    Akshay Masand
    Published on 01-15-2013 08:47 PM
    19 Comments Comments


    According to former Apple CEO, John Sculley, Apple must overhaul its supply chain in a bid to make its iPhone cheaper and meet the demand of low-cost smartphones in emerging markets. The Cupertino California company has seen its fair share of success with the device in several markets but going forward, Sculley feels Apple will need to depend on growth in emerging markets, where the handset’s premium price tag just won’t work.

    In an interview with Bloomberg Television in Singapore, Sculley said the following:

    Apple needs to adapt to a very different world. As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you’ve got to dramatically rethink the supply chain and how you can make these products and do it profitably.
    On the brightside, if anyone is capable of doing that, it’s Apple. Tim Cook has made a slew of significant changes to Apple’s supply chain and manufacturing process when he joined the company as Senior Vice President for Worldwide Operations in 1998. Since then, he’s already helped streamline the company’s operations to make them much more efficient. Now whether Apple wants to make further changes to produce a low-cost iPhone, however, is another matter in itself.

    If the recent comments made by Apple’s Senior Vice President of Worldwide Marketing, Phil Schiller, are anything to go by, then Apple isn’t interested in producing cheap products to help gain market share. As time passes by though, it looks increasingly likely that the company will have to do something in order to keep up with rivals, especially against Samsung which is still its number one competitor. Sculley continued by highlighting the fact that rival devices such as the Samsung Galaxy S lineup, continue to improve and become a greater threat to the iPhone than they have been in the previous years. According to Sculley:

    Samsung is an extraordinarily good competitor. The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see.
    We’ll have to see what strategy Apple uses to cater to emerging markets and budget-conscious consumers. Analysts are continuing to predict that Samsung’s share will increase its lead over Apple even more during 2013 if Apple does not change its strategy soon.

    Source: The Washington Post
    This article was originally published in forum thread: Former Apple CEO: Apple Needs to Overhaul Supply Chain to Reduce Cost of iPhone started by Akshay Masand View original post
    Categories:
    1. iPhone,
    2. Apple
    Comments 19 Comments
    1. Bloodwork's Avatar
      Bloodwork - 01-15-2013, 09:26 PM
      I don't think making the iPhone cheaper will boost iPhone sales, it will only make Apple cheap just like any other android device out there. They should improve the iPhone like old times and catch up with the innovation samsung is making with the S3.
    1. *T*'s Avatar
      *T* - 01-15-2013, 09:31 PM
      There is a reason why Sculley is no longer CEO...
    1. DaLsim's Avatar
      DaLsim - 01-15-2013, 09:39 PM
      Crapple just shot itself, Moving to bigger N better {anti{ishit}}.
    1. Greatbiguns's Avatar
      Greatbiguns - 01-15-2013, 09:58 PM
      Quote Originally Posted by *T* View Post
      There is a reason why Sculley is no longer CEO...

      Why is there a push for cheaper?
      Cheaper does NOT equal better....
      The push should be for better, more innovative products that the users want.
      Is that so hard to figure out?
      Like an iPad Mini that can make cellular phone calls!!
      Now we're talking
    1. Reymago23's Avatar
      Reymago23 - 01-15-2013, 10:42 PM
      the iPhone 4 is $0, 4s $99, and 5 is $199.00 with a 2 years contract, I think that is a resonable price for an apple product, Why would apple get even cheaper?
    1. iLoveWindows&iPhone's Avatar
      iLoveWindows&iPhone - 01-16-2013, 03:54 AM
      Quote Originally Posted by Reymago23 View Post
      the iPhone 4 is $0, 4s $99, and 5 is $199.00 with a 2 years contract, I think that is a resonable price for an apple product, Why would apple get even cheaper?
      You obviously have a firm grasp on supply chains, business, costs, and profits....Kidding. The prices you mentioned are what people pay when entering a 2 year contract, the actual retail price of the phone is about $400 or so more, but this still has nothing to do with the profit Apple actually makes off of each phone.

      But I really don't care about any of that right now....I CANT STOP THINKING ABOUT THAT SWEATER!! Where do I get one!!? Apple should include one of those sweaters with each iPhone and up the price $100!! The everyone's happy! Problem solved!
    1. bmwraw8482's Avatar
      bmwraw8482 - 01-16-2013, 03:59 AM
      Quote Originally Posted by Bloodwork View Post
      I don't think making the iPhone cheaper will boost iPhone sales, it will only make Apple cheap just like any other android device out there. They should improve the iPhone like old times and catch up with the innovation samsung is making with the S3.
      What innovation? A screen that's way too big but people are getting used to anyway, NFC that I have yet to see a single person ever use.
      I strongly agree with what you said about cheapness though. If everybody drove a Ferrari it just wouldn't be special would it?
      Innovation like what happened when the first iPhone was released is what they need but it will be extremely difficult to achieve. Innovation like samsung's phones is for Kia drivers.

      Quote Originally Posted by Greatbiguns View Post
      Like an iPad Mini that can make cellular phone calls!
      Wouldn't that make it a galaxy note? Ill never stop laughing every time I see someone with one of those
    1. AUZambo's Avatar
      AUZambo - 01-16-2013, 06:46 AM
      Quote Originally Posted by *T* View Post
      There is a reason why Sculley is no longer CEO...
      Exactly. Apple already made the move to make their phones cheaper when they dropped the price from $400 to $200 with the 3G. Of course, that decision may have been AT&T's more than Apple's since they're the ones subsidizing the cost, but my point remains.

      The iPhone 5 is the exact same price as every other high end smart phone.
    1. maajka's Avatar
      maajka - 01-16-2013, 07:26 AM
      Quote Originally Posted by Reymago23 View Post
      the iPhone 4 is $0, 4s $99, and 5 is $199.00 with a 2 years contract, I think that is a resonable price for an apple product, Why would apple get even cheaper?
      That's subsidized and in the US. You guys get ripped with monthly fees anyways, so 200 for iphone or S3, it doesn't matter. In Europe, the price is 679 euroes without contract, whereas you can get S3 for 420 euroes. And there are cheaper android phones for 150-200 too.
      Or, for example, you get the 5 subsidized for 100 and pay 45 a month, or get an S3 for free and pay 30 a month...

      So you can see the difference.
    1. Villebilly's Avatar
      Villebilly - 01-16-2013, 07:48 AM
      Reymago, that may seem cheap since you didn't include monthly rates. Most countries don't subsidize so paying 650 up front seems high compared to Galaxy. If you want to see how much the phone subsidies are a rip-off just look at the new deal at Walmart for $45 a month.
    1. bmwraw8482's Avatar
      bmwraw8482 - 01-16-2013, 08:54 AM
      Quote Originally Posted by Villebilly View Post
      just look at the new deal at Walmart for $45 a month.
      But then you have to go to Walmart...
    1. Awdad724's Avatar
      Awdad724 - 01-16-2013, 09:46 AM
      I could care less about the cost as long as I'm getting what I pay for. The saying "you get what you pay for" has always been the case with apple. You pay more you get more. You pay less you get a cheap plastic phone that's buggy after 1 year of use.
    1. Villebilly's Avatar
      Villebilly - 01-16-2013, 09:50 AM
      Is that what you think of the iPhone 4?
    1. tridley68's Avatar
      tridley68 - 01-16-2013, 10:29 AM
      Quote Originally Posted by Bloodwork View Post
      I don't think making the iPhone cheaper will boost iPhone sales, it will only make Apple cheap just like any other android device out there. They should improve the iPhone like old times and catch up with the innovation samsung is making with the S3.
      We already have a cheaper i phone it is the i phone 4 and 4s.
    1. sknet's Avatar
      sknet - 01-16-2013, 10:54 AM
      all made in plastic would be cost-cheap
    1. Donnutt's Avatar
      Donnutt - 01-16-2013, 11:07 AM
      Quote Originally Posted by Bloodwork View Post
      I don't think making the iPhone cheaper will boost iPhone sales, it will only make Apple cheap just like any other android device out there. They should improve the iPhone like old times and catch up with the innovation samsung is making with the S3.
      The only "innovation" I see with the S3 is the addition of NFC. It's still plastic and cheap feeling.
    1. nealh's Avatar
      nealh - 01-16-2013, 11:15 AM
      Scully, as I understand was not a good CEO I would take what he says with a grain of salt
    1. bigboyz's Avatar
      bigboyz - 01-16-2013, 02:10 PM
      Android phones are NOT sexy or sleek to me. They are NOT innovative and usually the size & weight of a brick! They are cheaper as they use cheaper materials(plastic over glass, metals) and the OS is not as stable or fluid. I don't mind paying good money for a quality product. I've had every iPhone except for the 5. I love my 4S and will wait for the 5S. Happy shopping everyone :]
    1. jasvncnt10's Avatar
      jasvncnt10 - 01-17-2013, 08:25 AM
      Quote Originally Posted by Donnutt View Post
      The only "innovation" I see with the S3 is the addition of NFC. It's still plastic and cheap feeling.
      I never did understand this. People say its plastic and cheap. Who cares most people put a case on their phone so the plastic doesnt bother me. Maybe im missing something but whats the difference if i have a phone with a glass back and put a case on it or a plastic back and put a case on it?

      Quote Originally Posted by bigboyz View Post
      Android phones are NOT sexy or sleek to me. They are NOT innovative and usually the size & weight of a brick! They are cheaper as they use cheaper materials(plastic over glass, metals) and the OS is not as stable or fluid. I don't mind paying good money for a quality product. I've had every iPhone except for the 5. I love my 4S and will wait for the 5S. Happy shopping everyone :]
      The weight of a brick? LOL. You should really look a the specs. They arent that far off.