Apple’s COO Tim Cook, and the Bernstein Research analyst Toni Sacconaghi, recently sat down for a little one on one, and lots of things were revealed in the conversation. The whole purpose of the interview was to talk about Apple’s business strategy, but for some reason Sacconaghi simply couldn’t hold it until his interview got published and decided to spill the beans on some interesting things that are going on at Cupertino:
While Tim stopped short of explicitly stating that Apple would pursue a lower price iPhone, he did state that Apple was working hard to “figure out” the prepaid market and that Apple didn’t want its products to be “just for the rich,” but “for everyone”; he also stated that Apple “understood price is big factor in the prepaid market” and that the company was “not ceding any market.” Cook noted that Apple executives including himself had spent “huge energy” in China, noting that it is “a classic prepaid market.” He further noted that the handset distribution model was poorly constructed and that Apple would look to “innovate” and do “clever” things in addressing that market.
Again, the chat isn’t really specific, but the whole prepaid market comments are the most interesting. Surely Apple is after making their iPhone fall in the hands of everyone they can in the market through a price drop, but making the full cost of ownership become affordable for people on a pre-paid service is genius. Many third world countries prefer this system because credit approvals stop being a limitation, and cash flows into the business before the user ever spends the services the carriers will provide. Time will tell if this ever holds water for the next generation iPhone launch somewhere in the summer.