Former Apple CEO John Sculley believes Apple needs a cheaper iPhone for emerging markets

Former Apple CEO John Sculley believes Apple needs a cheaper iPhone for emerging markets

The rumor that Apple is currently working on a cheaper low end iPhone for emerging markets is rife at the moment and former Apple CEO John Scully thinks it is a necessity for Apple to do just that. Sculley, who was Apple CEO between 1983 and 1993, believes that Apple must venture into the emerging markets with a low end iPhone if it is to continue its growth. Sculley was speaking in a television interview with Bloomberg from Japan last night.

“Apple needs to adapt to a very different world,” Sculley said. “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.”

“Samsung is an extraordinarily good competitor,” Sculley said. “The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see.”

For those keeping track at home, a Scully comments are like Steve Wozniak comments, and should never be confused for anything other than one guys long-out-of-the-loop opinion. However, like Wozniak comments, mainstream media keeps eliciting them, and they can create interesting ripples in the discussion.

Sculley, for what it's worth, also believes that Apple has exactly the right leader in place now that Tim Cook is in charge. Cook’s expertise controlling the supply chain will be critical in Apple’s future success. Sculley will mainly be remembered as being the man who decided along with his board of directors that Steve Jobs was surplus to requirements. He subsequently steered Apple down the path of competing with IBM in a highly competitive market place and as profits eroded and sales diminished, he was forced out of Apple in 1993.

Taking that into account maybe it is no surprise that he still believes that Apple needs to compete in that market again today.

Source: Bloomberg

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chrisoldroyd

UK editor at iMore, mobile technology lover and air conditioning design engineer.

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Reader comments

Former Apple CEO John Sculley believes Apple needs a cheaper iPhone for emerging markets

18 Comments

Because not every country has subsidised phones and they need to capture EMERGING markets (not such as USA) where they sell at full prices.

Actually the 4 is $450 and the 4S is $550. In other parts of the world there are no contracts. That is what he is talking about.

But still, I don't know why anyone cares what he thinks at this point.

Win!

Anyway: Apple doesn't need a cheaper iPhone... the only problems (here in Italy) are taxes: they are enough high to make the price rise too much... They just need to make better products 'cause Samsung and others are growing more and more, while Apple is stuck with this iOS 6 and its "no-innovation" plan... Apple should focus more on the software itself, not on lowing prices and have worse products... just my two cents

Apple does NOT compete against others nor on price. Apple competes against itself. It's biggest competitor is the current iPhone, iPad, Mini, etc. Jobs has ingrained a culture of doing what's best in design, marketing & pricing for mainstream customers, not what analysts & former CEOs say to do.

Apple takes in 3/4 of the profits in mobile, yet the peanut gallery keeps saying they need to mimic companies that are barely breaking even or losing money. I feel like I am taking crazy pills whenever I read these types of reports. Who are the big players in emerging markets?? RIM and Nokia, who are selling millions of phones while losing money... Oh I think Apple will be just fine without this business.

Louis Vuitton, Gucci, Ralph Lauren, Donna Karan and other high end fashion brands do not make "cheap" products with the intent of flooding 3rd world countries with junk. They care about their brand identity---in the same way that Apple does and should. The moment you begin adding cheap items, the aura changes and your whole brand identity suffers. Look at Compaq computers.

Having worked at Apple for both Steve Jobs and John Sculley, I can tell you this thought process is why Sculley was dropped from the board. He damn near destroyed that company......

I find it interesting we're still talking about this when Apple has made it quite clear, this cheap phone will never happen.

Just like the cheap ipad never happened? This is the new Apple. BTW..did you see how the iphone 5 was discounted over the holidays at various retailers? That's never really happened before...definitely not at launch. Apple usually has tighter control than that but it's lessening.

If Apple thinks they can launch a cheap phone with an adequate margin, then they will. We've seen with the ipad mini that millions don't care about retina, processor, etc. When I say cheap phone, around 299 off contract. There's already the ipod touch at that price point that is basically what people are talking about. Not glass, lower benchmarks, but still runs iOS. Throw in a chip and the carriers will probably pay the difference.

Some companies play the market share game, Apple plays to try and gain profit. I'm sure that once Apple can put out a product they believe is quality enough to suit their brand at a price where they can maintain a good margin they will. It will be attacked with ruthless aggression.

The better question is this: will there be enough of a market left for Apple to sell to? I think that is at the real heart of comments like this.

Such a lazy, unfunny attempt at a dig. We will see in a week, I am guessing a lot of people are going to be eating a healthy portion of crow