Confirmed: Apple’s marketing honcho shoots down budget iPhone talk

Phil Schiller (iPad mini event 001)

Samsung is planning to refresh its flagship consumer electronics products at a media event on February 21, rumors are swirling that Apple is about to branch out the iPhone into two hardware versions: one flagship model aimed at high-end consumers and the other budget model costing up to $149, reportedly made from cheaper materials and possibly crammed with less features.

The inexpensive device, according to the latest chatter, should be targeted at price-conscious shoppers in China and other emerging markets. Though both WSJ and Bloomberg over the past year reported a few times that Apple executives have explored a less expensive iPhone sold without a contractual obligation, the company’s SVP of Worldwide Marketing Phil Schiller has reportedly debunked the rumor in an interview with a Japanese newspaper…

By the way, Managing Editor Matthew Panzarino of The Next Web has verified with Apple – it’s an official interview.

Now, according to the rough machine translation of the original report in Shanghai Evening News, Apple is not attempting to grab its slipping market share in emerging markets away from Android cheapos by developing a new, less-pricey iPhone with fewer features.

Schiller apparently told the paper that Apple is unlike other companies which carpet-bomb the market with “multiple products in one breath”, in the hope that some gizmos will stick long enough to make a profit.

“Competitors launched many dimensions new products, but after purchase will find no suitable software products and user experience”, the rough translation has it.

As for targeting the low-end of the market, it isn’t in Apple’s DNA, he allegedly said. Instead, the Cupertino firm is all about providing premium products for the people who value integrated experiences.

In Apple’s parlance, Schiller said, this means marrying great technology to sophisticated production process making possible high-resolution Retina screens, precision aluminum chassis and other manufacturing process that – coupled with Apple’s world-class industrial design – make possible something like the company’s Rolex of smartphones.

So a lot of people in the Chinese market using a functional machine, some manufacturers use cheap smartphones replace feature phones, but this is not Apple’s product development direction.

Put simply, Apple’s in it for the long haul.

Every product that Apple creates, we consider using only the best technology available. This includes the production pipeline, the Retina display, the unibody design, to provide the best product to the market.

There you have it.

iPhone 5 (manufacturing process 011)

They want to build long-lasting relationship with the consumer and are ready not to just go the extra mile to win your respect, but also raise the ladder on what consumer electronics should be, how it should be manufactured, how it fits in your life and works seamlessly with the broad Apple ecosystem.

At any rate, it appears the blogs and big media are the only one concerned about click-bait market share headlines. Yes, Apple’s global share in smartphones is hovering between 20 and 30 percent, depending on who you ask. Yes, Samsung has twice as much market share.

But despite its smaller market share, Apple is constantly capturing three-quarters (and that’s a conservative estimate) of the profits in the entire cell phone business, which encompasses all smartphones and so-called dumb and feature phones.

Schiller noted as much, saying:

At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out. Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit.

Nailed it.

Schiller’s comment – and the fact that bothered to go on the record at all – pokes some holes in the budget iPhone rumor. Of course, that Apple won’t be releasing it in the near future doesn’t meant the company’s gonna stop researching the budget iPhone.

And trust me – if Apple knew how to make a contract-free, premium-quality $99 iPhone that doesn’t suck balls, they would immediately release it, no question about it.