by Anton Shilov
01/23/2013 | 11:57 PM
The top executive of Apple once again downplayed the importance of low-price products as a way to preserve or increase market share. Tim Cook believes that Apple needs to make appealing products which quality and performance will encourage their owners to buy more products from Apple, which will naturally drive the company’s revenue.
“The most important thing to Apple is to make the best products in the world that enrich customer’s lives. […] We are not interested revenue for revenue sake, we could put the Apple brand in lot of things and sell lot more stuff, but that is not what we are here for. We want to make only the best products and so what does that mean for market share? We have been able to do that […] I would not view these things as mutually exclusive as some might,” said Tim Cook, chief executive officer of Apple.
Many rumours recently emerged about Apple’s plan to design a special low-cost version of the iPhone to take advantage of rapidly growing smartphone demand in emerging markets. So far, Apple has simply slashed pricing on previous-generation models in order to attract price-conscious consumers. For example, if entry-level iPhone 5 costs $199 with a contract, then iPhone 4s is priced at $99 with subscription, whereas iPhone 4 is available for free with a two years plan.
While Apple can naturally continue to sell older-generation products on emerging markets at discount prices, in the long run this will unlikely help it to successfully compete against rivals since previous-gen products sometime lack functionality of current-generation low-end devices.
It should also be kept in mind that Apple earns loads of money by selling music, software and accessories for its PCs, smartphones and tablets. Developing markets hardly provide such opportunities, therefore it is in question whether the company actually wants to gain a strong presence in such countries.
While Apple does concentrate on premium devices, it still has created iPad mini using outdated components as well as low resolution display. Moreover, Apple continues to sell its cheap iPod shuffle music player that cannot be called the best music player in its price-segment. All-in-all, when Apple can make a relatively low-cost product and there is a market for it, it takes the opportunity in many cases, especially in case the final product encourages more purchases from Apple. Still, Apple prefers not to talk about pricing strategies and opportunities.
“I am not going to go into our pricing strategy, but we feel great about the opportunity of getting products to customers and a percentage of those buying other Apple products. And that we have obviously seen evidence of that through history and continue to see evidence of that today,” added Mr. Cook.