Tim Cook calls BS on production cut rumors, stays non-committal about low cost iPhone

Apple’s stock has been left battered and bruised in the last couple of months thanks to ‘reports’ about the iPhone 5 not selling well and Apple cutting down orders for displays for the phone. As a result, Apple’s stock which was once selling for almost $700 is now barely able to maintain $500, something that obviously didn’t please CEO Tim Cook. At the just concluded earnings call, Cook made his thoughts clear and urged analysts and members of the press to question the accuracy of such rumors.

“It is good to question the accuracy of any kind of build plans. Supply chain is very complex,” Cook said during the call. He mentioned there can be many variables even if one data point is accurate, variables like change in sources, performance of suppliers among others. Apple sold a record 47.8 million iPhones in its last quarter at an ASP of $640, which is almost similar to that when the iPhone 4S was launched.

Another burning question throughout today’s call was that of a low cost iPhone and the probability of launching a number of iPhones with variable display sizes. Cook answered them in a variety of ways but was clear that Apple wasn’t looking at increasing the display size of the iPhone. “We put a lot of thinking into screen size and believe we have picked the right one,” Cook said.

He still maintains the tried-and-tested line of thought that users should be able to use iPhones with a single hand and increasing the display size could compromise on that front. But then Apple is known to make such comments and do the exact opposite. For many years, Apple had maintained that the 3.5-inch display size was perfect and there was no need for a larger display. They launched the iPhone 5 last year that had a larger display but still could be used with one hand.

Cook remained non-committal on whether Apple would launch a low-cost iPhone. Initially during the call he maintained he was happy with the current state of affairs and toed the usual Apple line that it won’t compromise on user experience by cutting corners. He even said he was satisfied with international sales of the iPhone 5, which had a higher sell through than the iPhone 4S. Later in the call, however, he also mentioned how Apple managed its iPod product portfolio by launching a variety of iPods at different price points. Yet, the iPod touch, which is the most expensive of all the iPods, accounts for more than half of iPod sales.

Cook did the best he could to bury the matter but then you never know what Apple would end up launching. And like always, he is promising a year chock-full with exciting product launches. Will one of them be a low cost iPhone? That only time will tell.

  • Jamie

    Apple is on it’s way down. They sould like RIM did 4 years ago. The reason people buy more of the touch Ipod is because it is far more functional. With a cheaper Iphone, no one would buy the more expensive one just like what is happening to the Ipad 4. Who wants to pay that high price when they can spend half that and get the mini? They do the same thing so what’s the point. The oldest OS, the smallest screen and no where left to go spells disaster for this company. Lets hope they can bounce back when they crash.

    • aDeveloper

      Going by your analogy bmw n marc should make Maruti 800 like cars. Samsung shouldn’t sell Galaxy S3/4 and Note 2/3/4 and 10…only concentrate on sub 20k phones. And all should stop making 15 inch laptop as 11 inch are soo popular!

      First own few Apple & Samsung premium product then comment.

  • Titan

    Instead of innovating Apple is now playing catch up game. 3.5 inch size of iphone 4S compared to other android manufactures giving 4.7 inches. Again No LTE, quad core processor, NFC which was expected in iPhone 4S not provided, are present in android phones. And now in iphone 5 they have increased screen size and but no quad cores no wireless charging no 12 mp cameras. If they are going to play catchup game they are going to loose further. iPhone was known for its innovations (for ex aluminium body is a innovation which other are following) with a rock solid price. A 700$ phone would not have hurt Apple if all the mentioned features were present with iPhone 5.

    • aDeveloper

      u r throughly misinformed. It really doesn’t matter how many cores of cpu u have. It doesn’t matter whether u r 5.5ft or 6ft tall. Bigger aren’t always better. My 6mp dSLR is far, far better than 16mp p&s cam. Don’t go by numbers. The real thing is user experience…is it working good?? r u feeling comfy??…. rest r insignificant.

      Forget India, NFC has no real use in US either.

  • Titan

    Pixels w

  • Titan

    Few Things do matter on a premium phone (SGS3 Sony Xperia z and iPhone etc) such as Mega pixels count (comparing a 13 and 8 on a phone) storage options (providing expandable) and LTE vs 3G.