In an interview with a Chinese newspaper, Apple marketing chief Phil Schiller dismissed rumours of Apple developing a low-cost version of the iPhone.
According to the Shanghai Evening News, Schiller said while some other companies are using cheap smartphones to take the place of feature phones in the market, "this is not a direction that we want to be heading in with our products".
Earlier this week, reports emerged from both the Wall Street Journal and Bloomberg, citing unnamed sources (said to have been "briefed on the matter") as saying the company has for some time been working on a low-cost version of the iPhone, and could take it to market this year.
It was also speculated that Apple was considering using cheaper materials, such as polycarbonate, in order to bring the production costs down for a low-cost iPhone.
Schiller, however, emphasised in the interview that Apple focuses on only using the best technology and materials in order to bring what he believes to be the best possible products to market.
To date, Apple's strategy in the lower cost phone segment has been to sell older models of the iPhone at discount prices. According to Schiller, while Apple may have just 20% of the smartphone market, the company has 75% of the profit.
Sounds familiar
Apple commentator John Gruber says the talk that "Apple should make a cheap iPhone" is reminiscent of the argument that "Apple should make a cheap netbook" a number of years ago. In 2008, Apple co-founder and former CEO Steve Jobs was quoted as saying: "There are some customers which we chose not to serve. We don't know how to make a $500 computer that's not a piece of junk, and our DNA will not let us ship that.
"We've seen great success by focusing on certain segments of the market and not trying to be everything to everybody. So I think you can expect us to stick with that winning strategy, and continue to try to add more and more value to those products in those customer bases we choose to serve."
Gruber notes Jobs' comments did not mean Apple would never ship a $500 computer, but that it wouldn't do it until the company could make one that was both a good product and profitable. Apple now sells iPads and computers starting at $329.
"Their approach to lower price points for the iPhone will be the same," says Gruber.
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