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During the recent econominc downturn, Apple was among a few companies who managed to gradually improve its sales be revealing breakthrough products, lowering prices on some of the offerings and improving its services. Many analysts presently believe that the days of Apple’s rapid growth on well-developed markets are over and the company needs to address emerging markets with appropriate products. A former chief exec of Apple agrees.

John Sculley, the man who was hired to Apple from PepsiCo and who ousted co-founder Steve Jobs from the company, believes that Apple needs to take advantage of remarkable growth of emerging markets with its iPad, iPhone and other products. At present, Apple’s devices are simply too expensive for developing countries, whereas the company itself is tailored to make premium products. In a bid to actually develop inexpensive products and gain market share with them, Apple needs to redesign its supply chain on the first place.

“Apple needs to adapt to a very different world. As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you have got to dramatically rethink the supply chain and how you can make these products and do it profitably,” said John Sculley in an interview with Bloomberg news-agency.

For many years Apple has been focusing on innovative products that use expensive components and create new user experiences. Apple naturally continue to sell older-generation products on emerging markets at discount prices, but 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.

At the same time, it is obvious that in order to set up new financial performance records, Apple has to boost its volumes without reducing profit margins and quality of its popular gadgets. This can be done by expanding sales of existing products and by introducing brand new products to the market. In any case, Apple will have to somehow improve its supply chain to boost volumes. However, this may not be the time for Apple to enter $100 smartphone market just for the sake of the volume.

Tags: Apple, iPad, iPhone, iPod, Macintosh, Mac, macbook, MacBook Air, MacBook Pro, Business

Discussion

Comments currently: 9
Discussion started: 01/16/13 07:57:40 PM
Latest comment: 01/19/13 09:19:24 PM
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1. 
It seems John Sculley has some things against Apple like the products are expensive. In this case, he is persuading Apple to change to making low cost products. Premium products are costly. Making premium products that are half the price really makes a premium product not so premium anymore.

There is an old saying, "You get what you paid for." This means you buy a product that is cheap, you get cheap quality. Drop any generation of Samsung Galaxy S and do the same to any generation of an iPhone. The iPhone will survive while the Samsung Galaxy S phones will not. They do cost about the same amount of money.

It is nice to support the developing countries, but supporting them hurts the product line up because the products have to be cheap enough for these developing countries to buy.

I am not in developing country, so I could buy an Apple product. I choose not to because I do not feel the need to use one.
0 2 [Posted by: tecknurd  | Date: 01/16/13 07:57:40 PM]
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you re wrong, premium products are made in low quantity to make sure they are flawless, many people think that apple is premium because its looks. there is no products from bose,bmw,audi that are made in millions not disposable as ipad,they will use the best materials to make a durable product, apple coould have built the iphone with hardened case but they didnt care ITS NOT PREMIUM audi will not sell or rolex a products without extensive testing, sony sold 150 millions PS3 and no manufacturing flaws like apple
0 1 [Posted by: heldown  | Date: 01/16/13 11:48:11 PM]
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PS3 with no manufacturing flaws? Then how they melt with L.A. Noire?
There is not such a thing like products with no manufacturing flaws, something, somewhere, a part number or 2 will have a flaw.
Also apple is not selling durability, they are selling user experience.
0 0 [Posted by: nitro912gr  | Date: 01/18/13 02:31:53 PM]
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a cheap product that look like premium and sold , premium is not yellowish white case, or loose buttons
0 0 [Posted by: heldown  | Date: 01/16/13 11:49:13 PM]
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they are many videos demo showing dropping the iphone4 vs the galaxy s2, ur argument is invalid.
2 0 [Posted by: beancrafted  | Date: 01/17/13 11:22:12 PM]
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Galaxy S is a cheap product? Since when?
Galaxy S will break if dropped?
What are you talking about?
Galaxy S is not a cheap phone, is side by side in each generation with iPhone, both in price and specification.
1 0 [Posted by: nitro912gr  | Date: 01/18/13 02:28:35 PM]
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2. 
I guess he did similiar thing when he was in charge of apple and end result was share holders called steve jobs back
0 0 [Posted by: jagd  | Date: 01/16/13 10:53:01 PM]
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3. 
Steve Jobs will be turning in his grave at this suggestion. The Apple image has been carefully built up - expensive gadgets for the well healed. Any deviation from this would undermind the "cool" factor. In the auto industry, car makers create new brands for developing markets. But everyone has access to the roads and this fact can be easily disguised. It is impossible for Apple with their walled garden ecosystem.
1 0 [Posted by: linuxlowdown  | Date: 01/17/13 03:22:13 PM]
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4. 
What, apple reduce their massive % profit markups on every part of every product they sell...................but that wouldn't be cool
0 0 [Posted by: alpha0ne  | Date: 01/19/13 09:19:24 PM]
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