Tony Sacconaghi of Bernstein Research met with the top execs at Apple last week. He relased a note on Monday explaining what he learned during his meeting with COO Tim Cook, CFO Peter Oppenheimer, and VP of Internet Services Eddy Cue. Notably, Tim Cook mentioned that Apple is looking to expand their market share. Apple does not want it's products to be "just for the rich." Toni wrote that Tim "appeared to reaffirm the notion that Apple is likely to develop lower priced offerings." These seem to be targeted more to emerging markets in China and South East Asia than here in the West.
Mr. Cook never confirmed that Apple had specific plans to release a cheaper iPhone, but he did say that the company has "clever things" planned to expand into prepaid markets. "Cook said he felt that iPhone was just below food and water on Maslow’s hierarchy of needs." Apple is focused on expanding into the Chinese market, which is traditionally centered on prepaid plans. "Huge energy" from Apple has been focused on the Chinese market. While these clever things are going to be key to expanding Apple's sales into China, they should bleed over into the US and European markets as well. Expect to see increased iPhone sales worldwide.
Tim mentioned that sales of the iPhone increases Apple's sales of other products, especially in newly opened markets. This is a big deal, because the tablet market is about to kick into full gear through the rest of this year. There looks to be intense competition between manufacturers. Tablets bridge the technological gap between computers and smartphones. We're seeing offerings from both mobile companies like Motorola to more traditional computer companies like Asus and Apple. Cook seems to imply that Apple is plannning on expanding into emerging markets by offering cheaper prices on the iconic iPhone. These will help them drive up sales for their tablet products as well. In dollars and cents, the tablet market means $60 to $100 billion in business, just for Apple.
This news comes right before Apple's probable release of the next generation iPad Wednesday morning.
In related news, Hong Kong’s First Apple Store To Open This Year.