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iPhone
Tim Cook Rejects Bottom Feeding, Apple’s Goal to Build Best Phone
Wednesday, January 21st, 2009 at 6:25 PM - by Bryan Chaffin
Acting CEO Tim Cook, officially the company's COO, rejected the bottom feeder business model many manufacturers pursue, and instead emphasized his company's goal of simply building the best phone. The comments came during Apple's quarterly conference call with analysts on Wednesday following Apple's December earnings report.
"You know us," Mr. Cook said in response to an analyst's question about iPhone pricing changes Apple might make in the future in markets that don't use a carrier-subsidy contract model. "We're not going to play in the low end voice/song business. That's not who we are. It's not why we're here."
He added, "You know, we'll let somebody else do that. Our objective is not to be the unit share leader in the cell phone industry. It's to build the world's best phones."
Many analysts and pundits alike have said that Apple will have to lower the retail price point of the iPhone in order to continue to gain market share, a model that most cell phone makers use. While Apple's current retail pricing for the iPhone starts at $199, that figure includes heavy subsidies of as much as $400 from carriers who plan on making that money back over a two year or longer contract.
Some markets around the world, however, do not operate on a carrier-subsidy basis at all, which makes the iPhone often start at $600 or higher, a price that puts it -- as well as many other smartphones like the BlackBerry and others -- out of the reach of most local consumers.
In Apple's conference call, Mr. Cook offered India -- a market of almost a billion people -- as the largest such market, but his response was frank and to the point that while Apple wants to be in as many markets as possible, the company will continue to try to build the world's best phone.
Unstated, but implied within the context of the earnings call, was that the company will continue to offer that product at a price that generates a profit for the company's shareholders.
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