The Tim Cook Effect

By , Sep 20, 2011

As we inch closer to Apple’s expected announcement, it seems like everyone is scrambling to make their last minute predictions. What will the iPhone 5 look like? Is Apple really going to release a lower end model of its popular smartphone?

While most folks seem convinced that we’ll see two new versions of the iPhone this Fall, there are some skeptics. How can Apple offer a low-cost version of its exclusive handset? Wouldn’t it have to sacrifice quality? Not necessarily…

All of the information we’ve heard so far suggests that Apple is planning on re-releasing the iPhone 4 this year. And although the device is expected to be priced much less than its predecessor, it sounds like it will be a better handset.

But how could this be? How could Apple add a dual core processor to a phone that’s currently selling for $199 (on contract), and then reduce the price? You don’t have to look much further than the iPad for that answer.

When Apple announced the original iPad, people were ready to pay $1,000 for it. In fact, they were shocked when Steve Jobs unveiled its starting price of $499. Then, in 2011, Apple made the tablet thinner and faster, and continued to offer it for less than $500.

Apple can do this because of its major supply chain presence. No other company has Apple’s cash flow. And no other device-maker orders components like it Apple. But most importantly, no one else has Tim Cook.

Before he was appointed CEO, Tim Cook was the best COO (Chief Operating Officer) in the business. He negotiated supplier deals, and made sure devices got where they needed to be, all while keeping costs down and not sacrificing quality.

The competition is still scratching its heads trying to figure out how Apple has managed to produce its iPad at such a low cost. Tablet-makers are struggling to make a 10″ tablet under $500, let alone sell one.

I’m guessing we’ll soon see Apple’s ability to manipulate supply costs spill over into its handsets. Can you imagine a low-cost iPhone 4 with an A5 processor and 5mp camera? It would be a category killer. And that’s the Tim Cook effect.

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  • Tomas

    I’m getting really sad about Apple lately ;(

    • ViewRoyal

      Cheer up, dude. ;-)

    • Jay

      Not to excuse these the scene above, but realize that what you see above is standard in the electronic business these days. Your clock radio was probably made under the same conditions (and TV, and stereo, etc. Alas, even your trainers (aka “sneaker”). Note that more and more Chinese workers are beginning to strike. There are already signs such jobs are being relocated out of the country due to such strikes and inflation. Likely we’ll see India replacing China as the place for these assembly mills. It’s all cyclical. Look up “Triangle Fire” in Wikipedia.

  • George

    I predict the new 5 will have reception problems

    • Homey

      I predict that people will make predictions about things that they know nothing about. ;-)

      • http://www.idownloadblog.com Sebastien

        And I predict you will make predictions about people making predictions. Oh wait, that already happened ;)

  • jared

    the whole non summer schedule release really bugs me out. especially with the verizon iphone messing up the schedule too.

  • http://www.twitter.com/titogeorgie Tito Georgie

    I predict the iPhone 5 will have a apple logo in the back

    • Mike

      Good one!;)

  • MrA

    I predict an iPhone 5 rumor.

  • Max

    How? Well, start manufactering in china and barley pay the workers anything. And while we’re at it, lets not care about the environment.

    • It

      Can’t use “barley” if someone has Celiac disease.

  • user

    nothing we do is good for the environment…that’s not the point of this post.

  • Pigeon

    I predict a riot!

  • fdxgncgfn

    The Steves need the leaves.
    Steve Jobs- you should be happy he resigned from CEO. Either, he wouldn’t be able to innovate much more with his health problems. I’m not saying he’s bad, but, now he can’t handle it anymore. He chose to resign for a reason. Its like a lot of football players. When they are young, they are great. But when they become old, they start to lose their greatness

    Steve Ballmer-He is the worst CEO ever. Steven Sinofsky should take his place

    • simo

      I disagree Gates was even worse seriously the guy believes in pen computing WTF even after the newer and better tablets.

  • Leyev

    Apple is not straggling , they don’t need a low cost device

  • Bond, James Bond

    I predict that the new iPhone 5 can make calls.. oooh

  • Bond, James Bond

    My bad, will be able to make calls..

  • Isaac

    I wish the iPhone 5´s apple logo would shine like the macbooks. It would look great while in a call. I know about battery saving, but who cares, It would look great

    • MattaNZ

      yeah and scream PLEASE MUG ME !

      • CrazyBraulz

        I’LL MUG YOU!!!

    • simo

      do you know how apple achieves it on the mac book’s it uses the led back-lighting from the display so no extra energy is used. they could probably do it if they wanted to.