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As happens on occasion, Apple once again last week held a meeting with research analysts to answer questions and offer guidance on Apple's plans. While the company is careful not to reveal many specifics, analysts in attendance routinely parse executives' words carefully to try to ascertain future directions for the company in an attempt to guide their clients. Forbes shares some details from a report of the meeting issued by Bernstein Research analyst Toni Sacconaghi, which included a number of comments by Apple Chief Operating Officer Tim Cook regarding the iPhone and iPad.

Calling the iPhone "the mother of all halos" for its ability to draw in new customers for the iPad and Mac, Cook apparently noted that the company is not ceding the low end of the smartphone market and is specifically working on "clever things" to address the prepaid market that offers significant potential, particularly in international markets. Cook's comments could be interpreted to lend credence to claims that Apple is working on a cheaper version of the iPhone that could be offered at a relatively low price even without carrier subsidies requiring long-term contracts.
The analyst says Cook "appeared to reaffirm the notion that Apple is likely to develop lower priced offerings" to expand the market for the iPhone. Cook said the company is planning "clever things" to address the prepaid market, and that Apple did not want its products to be "just for the rich," and that the company is "not ceding any market."
According to the report, Cook also expressed optimism for the tablet market, suggesting that it would eventually turn out to be much bigger than the PC market. Cook expects strong competition in the market from both smartphone and PC manufacturers, but points to Apple's significant head start and "interesting new things in the pipeline" as reason for optimism regarding Apple's future in the market. Apple is of course holding a media event on Wednesday where it is widely expected to unveil the next-generation iPad.

Among other tidbits, Apple executives reportedly noted that carrier expansion continues to be a major goal for the iPhone, and the company is seeking ways to improve the use of its capital, in part by doing more deals with suppliers to lock in components over the long-term.

Article Link: Apple Executives Discuss Targeting Low-End Smartphone, High-Growth Tablet Markets
 
Aug 26, 2008
1,339
1
It sounds like the rhetoric has changed and Cook is basically in charge now. Apple has never in the last decade or so said, "We don't want our products to be just for the rich." They have always marketed themselves on being a "premium brand". I wonder where they are going from here.
 

MarlboroLite

macrumors 6502a
Oct 29, 2007
580
5
the 13 colonies
sounds like iphone nano will eventually become a reality. i doubt it can just be the same phone with cheaper parts, like for example using the ipod touch screen instead etc...it has to be a different looking phone.
 

deputy_doofy

macrumors 65816
Sep 11, 2002
1,424
308
It sounds like the rhetoric has changed and Cook is basically in charge now. Apple has never in the last decade or so said, "We don't want our products to be just for the rich." They have always marketed themselves on being a "premium brand". I wonder where they are going from here.

No it doesn't. Watch the iPad intro. Steve basically said he wanted it priced to put it into everyone's hands. I don't hear anything that's changed in that regard.
 

jb1280

macrumors 6502a
Jan 13, 2009
869
255
The expensive part of a smartphone at the moment is the contract, not the actual device.

Sure a $99 unsubsidized device would be great, but until data prices come down, at least in the US, the impact is minimal.
 

osx11

macrumors 6502a
Jan 16, 2011
825
0
quality = expensive = apple

less quality = less expensive = everyone else
 

mrsir2009

macrumors 604
Sep 17, 2009
7,505
156
Melbourne, Australia
Its pretty much the plans that make the iPhone not so good to buy in places like New Zealand, where I live. Your better off getting a Samsung Galaxy S without having to get a 24 month plan. The Galaxy IMO is just as good as the iPhone and with more freedom and less lockdown :)
 

Thunderhawks

Suspended
Feb 17, 2009
4,057
2,118
It sounds like the rhetoric has changed and Cook is basically in charge now. Apple has never in the last decade or so said, "We don't want our products to be just for the rich." They have always marketed themselves on being a "premium brand". I wonder where they are going from here.

What rethoric?

Apple set out to make a different computer than PC's and succeeded after a long struggle.

The one time they wavered, they almost went bankrupt, actually proving in that process that it was correct not to compete with the el cheapo's of the PC computer world.

So far that concept has worked well for them, why should they abandon it now?

Just look at the resale value of many their items compared to PC stuff.

What is wrong with quality costing a little more?
 

iOrlando

macrumors 68000
Jul 20, 2008
1,811
1
It sounds like the rhetoric has changed and Cook is basically in charge now. Apple has never in the last decade or so said, "We don't want our products to be just for the rich." They have always marketed themselves on being a "premium brand". I wonder where they are going from here.

Apple has never thought of themselves as a "premium brand". We (consumers) associated Apple with a premium brand.
 

Jcoz

macrumors 6502
Mar 25, 2008
349
0
What rethoric?

Apple set out to make a different computer than PC's and succeeded after a long struggle.

The one time they wavered, they almost went bankrupt, actually proving in that process that it was correct not to compete with the el cheapo's of the PC computer world.

So far that concept has worked well for them, why should they abandon it now?

Just look at the resale value of many their items compared to PC stuff.

What is wrong with quality costing a little more?

So you think apple almost went bankrupt by selling low MSRP/low margin Macs?

Not exactly what I remember.
 

Ugg

macrumors 68000
Apr 7, 2003
1,992
16
Penryn
The expensive part of a smartphone at the moment is the contract, not the actual device.

Sure a $99 unsubsidized device would be great, but until data prices come down, at least in the US, the impact is minimal.

Exactly. I'd love an iPhone but with my Virgin Mobile PAYG plan, I pay only $25 a month. Why would I want to spend more than three times that? I wouldn't mind shelling out $200 for a phone but see no point in paying for minutes, texts and data time that I will never use.
 

ten-oak-druid

macrumors 68000
Jan 11, 2010
1,980
0
More on the cannibalization of PC sales by tablets:

Tablets Eating PC Market Share With Some Fava Beans and a Nice Chianti
by John Paczkowski
All Things Digital
Posted on February 28, 2011 at 9:23 AM PT

"Driven by steep adoption rates and a proliferation of new devices, tablets will evolve into a $35 billion market by 2012, posting 171.8 percent year-over-year growth this year and 66.2 percent the next. That’s according to J.P. Morgan, which sees the tablet as a meaningful revenue opportunity for PC makers and an emerging threat, as well.

In 2010, the research outfit estimates, tablet-related cannibalization of PCs was about 18.9 percent. And in the next two years it will nearly double.

...

Lousy news for PC makers without a strong tablet offering, and great news for the company with the strongest tablet offering of them all: Apple. Moskowitz expects the iPad to sustain the company’s competitive advantage in the tablet market for at least the next few years. In 2011, for example, he sees Apple shipping 29.1million tablets–about 60.8 percent of the tablet market. The following year, however, that percentage will decline. Apple will account for 44.6 percent of tablet unit shipments, a sizable decline in share from the prior year, but one tempered by the unit sales and the great margins the company so often claims. Moskowitz believes about 60.5 percent of tablet market revenues in 2012 will go to Apple."

I disagree with the analyst's assumption that Apple's market share will drop by so much though. Unlike the iphone, users in the US are not restricted to a carrier so the decision to get an ipad vs. some generic clone has no such variable.
 

Padraig

macrumors 6502a
Dec 12, 2005
601
0
What rethoric?

Apple set out to make a different computer than PC's and succeeded after a long struggle.

The one time they wavered, they almost went bankrupt, actually proving in that process that it was correct not to compete with the el cheapo's of the PC computer world.

So far that concept has worked well for them, why should they abandon it now?

Just look at the resale value of many their items compared to PC stuff.

What is wrong with quality costing a little more?

You must be forgetting the prices they were charging when they were trying to "compete with the el cheapo's" Relatively, they were a lot higher than they are now. I'm always amazed that people don't think Apple isn't going to manufacture a cheaper PAYG version of the iPhone. Apple wants every segment of the market, the shuffle is an example of that desire.
 

wizard

macrumors 68040
May 29, 2003
3,854
571
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TennisandMusic said:
It sounds like the rhetoric has changed and Cook is basically in charge now. Apple has never in the last decade or so said, "We don't want our products to be just for the rich." They have always marketed themselves on being a "premium brand". I wonder where they are going from here.

Where do you get this idea? Apple has never been about the high end, they simply sell their product at a reasonable profit. If Apple was actually targetting the high end, there would be many alternative MP3 players on the market with reasonable share.

I actually don't know how you can say what you did about premium brands as that has never been part of Apples marketing.
 

farmboy

macrumors 65816
Nov 26, 2003
1,106
271
Minnesota
So you think apple almost went bankrupt by selling low MSRP/low margin Macs?

Not exactly what I remember.

Well, there was more than one issue at the time, and the clones definitely didn't help the margins, so yeah, it almost did them in.
 
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