I've rather been wavering over whether Apple should introduce low cost versions of the iPhone and possibly iPad. There's a trade off there. Yes, lower cost entry level models would indeed enable them to gain more customers. But there will be some level of cannibalisation, where customers who would have bought the full price, high profit, model will now trade down. Whether total profits go up or not is therefore a result of the balance of those two factors.
Which way it would work, who knows? But that is the problem that Apple faces. Should they go for market share? Or should they concentrate on maintaining profit margins? Profits being what a company is for after all?
And then we have John Sculley weighing in on the point:
John Sculley, the former PepsiCo president who served as CEO of Apple during most of the 1980s and early 1990s, says that while Apple is "an extraordinary company," it has not done enough to adapt its products to suit emerging markets.
.....
Emerging markets will be the key to future success, Sculley says, but there's no way Apple will be able to gain a foothold in the developing world as long as its products are priced like luxury items.
"Apple's a premium-priced story," Sculley said. "And now it needs to adapt to where the growth is, which is the emerging markets. And the price points are going to be dramatically different in the emerging markets."
Well, yes, so that's decided then. It's a bit like listening to Polly Toynbee proffering political advice: whatever it is that she's pushing do the opposite and you'll be fine. Given that Sculley says Apple must have low priced entry level models clearly the firm should refuse to even think about them and concentrate instead of making premium priced and aspirational products.
After all:
Owing to his poor performance at Apple, Condé Nast Portfolio and Business Insider have both included Sculley on their lists of the worst American CEOs of all time.
Hey, works for me.
