Apple’s Low Cost iPhone – Good or Bad Idea?

Apple LogoBelieve it or not, this isn’t as slam dunk as you might think it is…

Emerging markets are a big deal.

In areas like China, Korea, parts of Africa, etc., where there are untapped consumers just waiting to buy a smartphone, the right device at the right price can sell and sell very well. Low cost, low margin phones are intended to make money in volume sales.

According to an article published on TUAW, former Apple CEO John Sculley agrees that Apple needs to produce the low cost device, which for many in those markets, is the only computing device they will own. While Sculley acknowledges that there’s “nothing wrong” with the current iPhone, he also acknowledged that Samsung is very good at what they do, and implied that Apple needs to figure it out and provide a competing product.

Sculley agreed that Tim Cook is the right person to lead Apple at this time due to his operations experience. Apple’s decision to cut its product update cycles to 6 months instead of 12 will require solid supply chain experience, and that’s right up Cook’s alley.

While its still unknown if a low cost iPhone would make an appearance in either the US or Europe, there seems to be a shift in thought in the smartphone arena. Lower cost, unsubsidized devices seem to be the direction that the world wants the industry to go. That being the case, I suspect that we’re going to see a number of exciting changes over the next year or so.

Whether or not a low cost iPhone is a good or bad idea is going to be validated by Apple’s financial and stock performance. The markets seem very fickle right now, with Apple stock jumping 3-5% over the past couple of days on news of component order cancellations and their 2013 product pipeline, respectively. Until the world decides that Apple knows what it wants to be when it grows up, I’d expect a great deal of fluctuation in their stock price and speculation in the news regarding the company’s viability in a post-Jobs era.

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