Apple must cut costs says ex-CEO amid plastic iPhone rumors

Jan 15, 2013
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Apple has made squeezing the supply chain an art-form, but the company must "adapt" to a world where budget handsets are gaining traction, former CEO John Sculley claims, amid whispers of a more affordable plastic-bodied iPhone. "Apple needs to adapt to a very different world" Sculley told Bloomberg Television, The Washington Post reports, arguing that the Cupertino firm he used to helm must "dramatically rethink the supply chain and how you can make these products and do it profitably" in the face of $100 smartphones.

"The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see" Sculley points out, describing Samsung as "an extraordinarily good competitor." However, the former chief exec also had some words of praise for Apple's current CEO, Tim Cook, who he calls "exactly the right leader" because of the expertise in the supply chain he brings to the role.

Questions about Apple's "budget" phone plans reignited earlier this month, with reports that the company was planning a "cheaper" version of the iPhone to better compete in developing markets such as China. However, the company's marketing chief was swift to deny chatter of a low-cost model, arguing that such a handset "will never be the future of Apple’s products" and reiterating that Apple's focus is on premium devices.

Nonetheless, Schiller's denial still gave room for speculation, with suggestions that - just as the company did with the iPad mini - Apple could pursue a distinctly separate device from the existing iPhone, rather than make a cheaper copy. That could involve a return to the plastic chassis of the iPhone 3G/3GS, notorious rumor-monger DigiTimes suggests; the Taiwanese whisper merchant - which has such a mixed track record that we recommend great fistfuls of salt - claims to have heard from the supply chain that Apple will adopt an unusual mixed plastic and metal casing with some visibility of the internal components possible. That could arrive on store shelves by the second half of 2013, it's claimed.

The chatter of cheaper iPhones follows reports that Apple slashed display panel orders in recent weeks, indicating lower than expected production of the iPhone 5. However, there are mixed opinions as to whether - if true - that's down to reduced demand or continuing bottlenecks in manufacturing caused by ongoing production difficulties.


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