Apple remains vague on cheaper iPhone

News Marin Perez 12:40, Feb 12 2013

Apple CEO Tim Cook said the company wouldn't release an iPhone that's cheaper just for the sake of being cheaper

The rumors are flying that we'll see a cheap iPhone this year but Apple CEO Tim Cook shed some light on the company's philosophy on budget pricing. 

During a Goldman Sachs Technology and Internet Conference Tuesday, Cook didn't address a cheaper iPhone directly, but he did bring up the iPod as an example of how it approaches different pricing. He said the original version came out at $399 but now users can get an iPod for as little as $49 (the iPod Shuffle). 

Cook said Apple won't bring out a product at a price point unless it believes that it can make a great device. 

"The only thing we'll never do is release a crappy product," Cook said. 

Another example of this philosophy can be found with the netbook craze. A few years ago, netbooks were selling quickly and many analysts were predicting that Apple needed to make one to tap into this popular market.

Cook said the company couldn't figure out how to make a Mac computer that it was satisfied with at the right price point, so it never made a netbook. Instead, the company introduced the iPad for about $500 and this has kicked off a mega-popular tablet industry while netbooks remain a novelty of the past. 

What does this mean for a cheaper iPhone? Apple has clearly worked on cheaper iPhone prototypes but the company instead decided to discount previous models. This has been a success in the United States, as Verizon and AT&T had banner holiday quarters thanks to the success of older, cheaper iPhones. 

Apple does appear to be leaving some money on the table by not having a cheaper iPhone available for markets like India, Brazil and China though. These markets have seen a glut of Android smartphones for about $150-$200 outright.

One thing is certain: Apple won't release a cheaper iPhone until it is happy with the user experience it offers. 

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