Ex-CEO: Apple should focus on cheaper iPhone, developing markets

Ex-CEO: Apple should focus on cheaper iPhone, developing markets

Summary: Should Apple focus less on the latest technological innovation and more on appealing to consumers with less to spend?

iphone cheaper sculley emerging markets apple bloomberg

Ex CEO of Apple, John Sculley, believes that the tech giant needs to focus on cheaper products to tap into emerging markets.

Speaking to Bloomberg, the former CEO's comments relate to the rumors surrounding Apple's potential plans to release a cheaper version of the popular iPhone.

Smartphone saturation continues to rise worldwide, and due to this, Sculley believes that Apple will have to rely more heavily on emerging markets in order to retain the lion's share of the market. The CEO, at Apple between '80s and '90s commented:

"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."

Sculley continued to say that Tim Cook was the "exactly the right leader" to keep Apple afloat against increasing competition from rival firms including Samsung, due to his supply-chain experience and expertise. Commenting that although there was "nothing wrong" with the iPhone 5, Samsung was closing the gap in terms of competitiveness due to the rival firm's smartphone features.

"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."

Recent reports suggested that Apple missed its manufacturing targets this quarter based on estimated iPhone demand, and the firm apparently only ordered half of the 65 million iPhone displays it anticipated for the first calendar quarter of 2013. Perhaps there is something in Sculley's view, although whether focusing on cheaper products would be the right direction for the tech giant remains debatable -- or whether it simply should concentrate on providing better features than competitors. 

Apple's marketing boss Phil Schiller also disagrees with the ex-Apple chief's view. Recently, he ruled out the possibility of a cheap phone from the Cupertino., Calif. firm, ruling that cheapness will "never be the future of Apple products."

Topics: Apple, Smartphones, Tablets, China

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  • Didn't John Sculley almost destroy Apple

    John Sculley is hardly a voice of credibility when it comes to Apple or to tech in general.
    • I was thinking the same thing.

      There's a reason he's refered to as "Ex" CEO
      William Farrel
    • He did it with a race to the bottom.

      Unfortunately, the products Apple produced under him were generally at the bottom of the performance charts and nearly the top of the pricing structure, while clone makers made the faster and cheaper machines that would work with more standard pieces.
      • Perhaps he is speaking from experience then?

        I thought the same thing when I first read who was giving advice and my first reaction was, yeah right.

        Reading what you just said does shed some light on a few similarities. It may not be Apple vs Apple, but Apples competition is putting out devices that are cheaper, comparably fast, more feature rich with more industry standards.

        The rate at which Apple is losing marketshare should be cause for alarm.
  • So says the man that started the downward spiral

    ... a few decades ago.
    They should play the race to the bottom in order to gain marketshare, not profits.
    Sounds like a winning strategy there John. Other than Samsung, who should we ask? HTC, Motorola, Sony, LG? How's the race to the bottom, working out for them?
  • Join the Graveyard

    Appealing to the lowest common denominator won't help Apple stay viable. Look at the PC side and you will see a graveyard of companies. Though I have mixed feelings about Apple products, I can say that they are an industry leader. I was incredulous over the first iMac not having a floppy drive, but they were right about that.

    I'm not blind to the recent decline of Apple. They have a niche customer base, and maybe the pizzicato of new products has made them weary, but watering down their product catalog will not help. Apple should focus on innovation and launch the next advance in human-computer interaction. Broadening their market is not viable. Apple is profitable due to early adopters. Saturation of new technology is happening faster, Apple has the capacity to capitalize on this better than any other technology company.
    BKLYN Vet
  • Apple and Cheap don't belong together.

    Wouldn't this go completely against the Apple Brand? Apple is known for it's high quality/high end products. Be known for something not everything. The day Apple produces cheaper products is the day Apples Brand perception will be tarnished.
    • Agreed, though it spells doom for Apple, remember BetaMax.

      BetaMax had always provided a better picture at a higher price than VHS. In the end Sony dropped it.

      Smartphones are more susceptible to this reality due to software and electronic innovation associated with it. Apple had a huge lead for years, though securely and steadily it keeps losing all its dominant leads. The reason is simple, lower prices mean more people can experiment with Android, integrate that brain power overtime Apple will be crushed.

      The longer it takes Apple to come to terms with this reality, the less chance it has for continued success. Its stock price reflects this reality.
      • "experiment with Android" Some will find Android to heir liking... Some

        will not. Eventually they will find and perhaps like Apple better and a good solid satisfied customer is gained who will likely keep coming back for more. Apple does not need to be market share leader no it needs to be a PRIFIT leader and in that be able to keep exploring and developing new things without the RISJ if collapse that many an OEM in the razor thin margin faces and that is a FAIL if your RISKS do not pay off. Apple simply put can afford to take risks and fail cause it has the money to do so. Others in the industry are lucky to see their doors remain open another day.

        Pagan jim
        James Quinn
        • when the G1 came out I predicted it would take over the iphone

          Sat and watched as my prediction came true within three years.

          Now just got the pop corn and my drink, and will sit and watch Apple be consumed by its lack of vision. May take more than 3 years, but over time it will follow the path of the Macintosh.
          • Only that IT NEVER DID

            The G1 was a total failure. Now if you are talking GS3, it still not even close to selling enough to match the iPhone selling 49 million last quarter alone.

            And please, don't use the dumbroid logic ..... Samsung (allegedly) SHIPPED 100 million Galaxy brand devices .... but that is ALL of the devices with the name Galaxy in it. Samsung themselves claimed only 10 million GS3 manufactured ... an number that is just below 20% of 49 million
          • Only that IT NEVER DID

            The G1 was a total failure. Now if you are talking GS3, it still not even close to selling enough to match the iPhone selling 49 million last quarter alone.

            And please, don't use the dumbroid logic ..... Samsung (allegedly) SHIPPED 100 million Galaxy brand devices .... but that is ALL of the devices with the name Galaxy in it. Samsung themselves claimed only 10 million GS3 manufactured ... an number that is just 20% of 49 million
          • I'm pretty sure the SG3 outsold the 4S prior to Q3-2012

            It won't outsell the iphone5 this quarter, but I think for the first time the iphone wasn't the top selling phone.

            Outside of the USA I think you may be surprised how often the Galaxy line outsells the iphone or competes close enough. Google it.
      • Apple has a cult following

        It could forfeit it through its own stupidity, but it would take a lot (after all, the cult survived John Sculley). As long as the cult survives, Apple and iOS will survive, as there is room for more than one player in this market.
        John L. Ries
      • The iPhone / iPod market is over. Apple user want something new to play

        What about iGlasses? Technology is there, and it would sit good with Apple's marketing.
        What they do? No Clue, but I am sure Apple will tell us !
  • .

    Sculley is actually a double agent hired by Bill Gates in the 80s to ruin Apple. Once that rumor got out, he's been re-hired for the same duties by a consortium of companies lead by HTC and Samsung. Google is rumored to be a silent partner.
    • I seriously hope that's tounge in cheek

      If not, I could make a small fortune on tin-foil hat sales! :)
      William Farrel
      • .

        oh no its some serious lol
        • .

          eh... forgot zdnet takes out html tags... it was supposed to be sarcasm tags lol
  • apple already sell cheap iphones

    What apple really needs to do is improve thier flagship phone. The lack of innovative features and functions that are common on todays top shelf smartphones has left iphone5 nothing more than an entry level smatphone for the elderly.
    Holden Monaro