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Ex-Apple CEO Sculley Backs Cheaper iPhone

Now, former Apple CEO John Sculley has chimed in with a vote in favor of the rumored device.

By Angela Moscaritolo
January 16, 2013
iPhone 5S rumor

Whether or not Apple is readying a low-cost iPhone for emerging markets around the world has been a topic of discussion among the tech community recently. Now, former Apple CEO John Sculley has chimed in with a vote in favor of the rumored device.

Apple has seen much of its success to date in developed regions like the U.S. and Europe, where the smartphone market is becoming saturated. To continue growing, the company will now need to turn to emerging markets like India, where price points are "dramatically different," Sculley said today in a Bloomberg Television interview from Signapore.

"There's only 4 percent penetration of smartphones in India at this time against almost 50 percent in the United States," he said. "As people start to adopt these products in emerging markets ... there's bound to be new price points. That requires really re-thinking the whole supply chain and how you price and how you make money."

Analysts for years have been saying that Apple is working on a cheaper iPhone for emerging markets. Rumors began heating up last week following a Digitimes report that claimed Cupertino was planning to roll out a low-cost iPhone in China and other regions in the second half of 2013. One analyst predicted that the device could generate $6.5 billion in revenue for Apple this year.

There was then reports that Apple execs said the company was not preparing a low-cost iPhone, but the Shanghai Evening News, which published that report, later revised its story and backtracked on Phil Schiller's flat-out denial. 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.

Sculley said today on Bloomberg that rival phone maker Samsung poses the biggest challenge to Apple. The Korean electronics giant is making phones, such as the uber-popular Galaxy S III , that are on-par with the iPhone, he said.

"Apple has now a real competitor, and it's got to learn how to sell products that are priced for the price point that the emerging middle class in Asia, for example, can afford," Sculley said.

Though the iPhone remains the most coveted smartphone among prospective buyers in North America, demand for the device has waned since the iPhone 5 made its debut, according to a recent survey from 451 Research's ChangeWave service. Recent reports indicate that Apple slimmed down iPhone component orders amidst that sluggish demand.

Meanwhile, demand for Samsung phones is surging. Samsung topped the global smartphone market last year, after beating out Apple by just one percentage point of market share in 2011, according to data released by IHS iSuppli in December. The company was projected to widen its lead in 2012, accounting for 28 percent of global smartphone shipments, compared to Apple's 20 percent.

For more from Angela, follow her on Twitter @amoscaritolo.

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About Angela Moscaritolo

Managing Editor, Consumer Electronics

I'm PCMag's managing editor for consumer electronics, overseeing an experienced team of analysts covering smart home, home entertainment, wearables, fitness and health tech, and various other product categories. I have been with PCMag for more than 10 years, and in that time have written more than 6,000 articles and reviews for the site. I previously served as an analyst focused on smart home and wearable devices, and before that I was a reporter covering consumer tech news. I'm also a yoga instructor, and have been actively teaching group and private classes for nearly a decade. 

Prior to joining PCMag, I was a reporter for SC Magazine, focusing on hackers and computer security. I earned a BS in journalism from West Virginia University, and started my career writing for newspapers in New Jersey, Pennsylvania, and West Virginia.

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