For Apple enthusiasts that love stalking the company’s every move and making predictions, there have been two topics of interest lately – a possible cheap iPhone and Apple’s plans to target China. The vision to increase penetration in China seems logical as the country rapidly moves towards smartphones. The company already has four retail stores in the Republic, and is set to open up more next year. Tim Cook has himself visited the Mainland twice since March. If Apple is focusing heavily on China, then it would make sense to have a cheap phone. Chinese users are relatively new to smartphones and maybe need to buy the concept first, the premium phone later. So are the two developments connected?
Bloomberg started off the stream of speculation when it reported that Apple is making a new iPhone using cheaper raw materials. The price of this new iPhone was estimated at less than $150, even as low as $99. Of course, it led to a contagious frenzy. Now, in spite of denial from Head of Global Marketing, Phil Schiller, the rumor mills refuse to quit. Well, Apple has been capricious and surreptitious about its product decisions before, so the guessing isn’t going to stop with one statement. And one shown on the Shanghai Evening News in Mandarin at that! The scope for the message being lost in translation has everyone pegged on for further clarification. Some even interpret Shiller’s aversion to “cheap” iPhones as a description of quality and standards, rather than price points. Moreover, the fact that he gave this statement out to China also says that Apple is trying harder to build its reputation there.
Furthermore, recent evidence of Apple pricing shows that it could very well move into a lower bracket. More of its older phones are available on discounts, smaller contracts and flexible terms now. Apple’s profits in emerging markets like China have been the highest, in spite of its low market share. But a foresighted company would realize that with cheaper alternatives like Huawei constantly upgrading their technology, this success could slip away easily. Therefore, to adapt to a dynamic economic situation, Apple would benefit from widening its outreach. At the same time, it is also important that the brand maintains its lighthouse nature and high stature. Resorting to cheap materials or substandard practices for some products may damage the entire image of the company.
