Wow, Reuters pulls Phil Schiller ‘no budget iPhone’ story. Umm… Now what?


Here’s something for naysayers to chew on: Reuters, the respectable news gathering organization, Friday morning issued a clarification stating it had withdrawn the story that was originally published under the headline “Apple exec dismisses cheaper iPhone as a market share grab — report”. It’s not clear what prompted Reuters to rescind its report sourced from an interview Apple’s marketing honcho Phil Schiller gave to the Shanghai Evening News.

iDB also cited that Chinese newspaper interview, in which Schiller reportedly claims that “despite the popularity of cheap smartphones”, a so-called budget “will never be the future of Apple’s products”. It’s unclear why Reuters has now distanced itself from Schiller’s denial concerning the so-called iPhone mini project.

Managing Editor Matthew Panzarino of The Next Web has verified with Apple that it’s an official interview and Reuters relayed his claim. Later yesterday, however, the news organization updated its original interview story after the Shanghai Evening News made “substantial changes to its content”, but didn’t give the specifics.

Friday morning, Reuters retracts its story altogether. It’s an interesting turn of events no matter how you look at it, one that raises new questions. Like, why would Reuters risk its credibility by pulling the Phil Schiller budget iPhone story, despite the supposed confirmation from Apple? So… What do you make of this?

The update with the headline “Apple dismisses cheaper iPhone story withdrawn” reads:

Reuters has withdrawn the story headlined “Apple exec dismisses cheaper phone as a market share grab-report” which was based on a Shanghai Evening News report that was subsequently updated with substantial changes to its content.

Even more interesting than that, Reuters warns that “no replacement story will be issued”. It also remains unclear what the “substantial changes” made to the Shanghai Evening News story are, but that’s kinda beyond the point now that Reuters has distanced itself from that report.

Clearly the development casts some doubt over The Next Web’s claims that it has verified the authenticity of the Schiller interview. When I asked him on Twitter, Panzarino re-iterated that Apple in fact has officially confirmed the legitimacy of the interview.

Schiller’s alleged comment in the Shanghai Evening News interview, according to a translation in The Next Web post, reads:

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.

Panzarino told me yesterday this was more or less accurately what Schiller told the Chinese paper.

Something’s not right here. An Apple exec says something important to a Chinese outlet and big media relays it then drops that story entirely, leaving unanswered questions dangling in the Interweb’s limbo.

There can only be one reasonable explanation: where there’s smoke, there’s fire, too.

Sprint’s David Owens briefly touched on the subject of the more affordable off-contract iPhone in an interview with Bloomberg TV.

I can barely refrain myself from ending this post with the “told ya’ so” line.

Told ya’ so! Yesterday, I explained Schiller’s refutal means nothing given Apple’s history of lying to the media, like when Steve Jobs said Apple would never make a phone or a tablet or a seven-inch tablet for that matter.

And I’m not the only one, here’s from The Verge:

While Schiller’s comments seemed to contradict the earlier reports, it’s important to remember that Apple has never made a habit of making binding public statements about new products before they are released. The company had indicated numerous times it wasn’t interested in pursuing iPads in sizes below 9.7 inches in the past, for example; the iPad Mini was then announced earlier this year.

Talk of Apple building on a new, less-expensive iPhone model made from cheaper materials and sold off contract for less than $200 has picked considerable steam with recent reports published by The Wall Street Journal and Bloomberg claiming Apple has explored such a device for years to curb market share losses in China, Brazil and other emerging markets.

iPhone 5 presser (Phil Schiller, iPhone family prices)

Per the Journal:

One possibility Apple has considered is lowering the cost of the device by using a different shell made of polycarbonate plastic. Many other parts could remain the same or be recycled from older iPhone models.

Apple’s most affordable off-contract devices is the $450 iPhone 4. However, that smartphone was released back in the summer of 2010.

iPhones (iPhone 5, iPhone 4S, iPhone 4)

Unlike in the United States, carriers elsewhere mostly do not help absorb smartphone prices with subsidies. Moreover, consumers outside the US market typically buy their handset separate from their wireless contract.

Due to taxes, the $450 contract-free iPhone 4 costs up to $490 in China and a whopping $750 in Brazil, putting it out of reach for most people in these emerging markets.

And the plot thickens…