Apple Exec Dismisses Notion of a 'Cheaper' iPhone

Update: The Shanghai Evening News has since revised its story and backtracked on Schiller's flat-out denial of a low-cost iPhone. Rather than quoting him as saying that Apple "will not push a cheaper smartphone," the paper now quotes him as saying that Cupertino "will not blindly pursue market share," Reuters reported.

Original Story: Despite a flurry of rumors, Apple won't be making a cheaper iPhone any time soon, according to senior vice president of worldwide marketing Phil Schiller.

Schiller reportedly told Chinese-language daily the Shanghai Evening News that "despite the popularity of cheap smartphones, this will never be the future of Apple's products."

The Apple executive's full explanation, as related by The Next Web in a report citing the newspaper's interview, included a nod to Apple's industry-leading profit margins and appeared to argue that those would be threatened if the company started making lower quality products.

"At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out," Shchiller was quoted as saying. "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 percent, we own the 75 percent of the profit."

Apple did not immediately reply to a request for comment. The Next Web said Apple had confirmed that Schiller's interview with the Shanghai Evening News was official.

The notion that Apple was planning a cheaper iPhone for release in late 2013 in certain markets, particularly Asian markets, was jump-started by a report from Taiwanese tech journal DigiTimes but also appeared in some form in reports from Bloomberg and The Wall Street Journal.

The rumor quickly got the tech press and industry analysts buzzing—for example, Piper Jaffray analyst Gene Munster estimated Wednesday that a low-cost iPhone could rake in upwards of $6.5 billion a year for Apple.

With Apple apparently kiboshing the bargain handset, however, those dollars are going to be left on the table.

Or are they? As The Next Web notes, Schiller's statement only appeared to relate to the quality of any future iPhone's components and build—but not necessarily their price points. As consumers know, subsidized iPhones sold through various carriers can be purchased for steep discount, at least for the device itself, compared to what one would pay for an unlocked version of the phone.

Those rumors of a "cheaper" iPhone, some citing reportedly well-placed albeit unnamed Apple sources, could still be accurate in terms of a pricing strategy Apple has planned for emerging markets if not on how it gets to lower prices.

At any rate, Apple historically never budges on its self-proclaimed dedication to making quality products, but it's certainly shifted gears in the past on what "quality" actually means. Many of us recall when the 4.5-inch iPhone was declared by the late Steve Jobs and others as optimally sized for the human hand, which was apparently a scientific fact all the way up to the point that the 4.9-inch iPhone 5 ( at Amazon) was released last year. Not to mention the ridiculousness of a tablet smaller than the original, full-sized iPad—which miraculously disappeared as an issue when the iPad mini ($399.00 at Amazon) came out.

For more, see PCMag's full reviews of Apple's iPhone 4S, iPhone 5, and iPad mini.

For more from Damon, follow him on Twitter @dpoeter.