Budget iPhone needed for Asia, says former Apple CEO

Apple needs to lower the price of its iPhones to spur sales in Asia - particularly in China and Hong Kong - where its rivals have made inroads largely by undercutting, said its former chief executive John Sculley.

"Apple, when playing on its own turf, does pretty well," said Mr Sculley, referring to sales in the United States.

The tech giant reported recently it sold more than 31 million iPhones globally in the third quarter, up 20 per cent from the same time a year ago. But the company is struggling in some larger overseas markets where it is trying to expand.

Third-quarter sales of Apple devices overall in China fell 4 per cent compared with sales in the same quarter a year earlier.

In Hong Kong, Apple's sales dipped some 20 per cent.

The numbers are not surprising, said Mr Sculley, given that Android devices by China manufacturers ZTE and Huawei can be as much as a third cheaper than iPhones.

"When it has got a high-priced product that is beyond the price point of the developing middle-class, it is not going to do as well," he said.

He believes Apple will soon introduce a lower-priced line of iPhones and expand its trade-in programmes to encourage users to upgrade to newer iPhones.

"My guess is Apple will introduce some improved products at the high end and put in a trade-in programme that will buy up older models, refurbish them and sell those back at a lower price point into Asian markets" said Mr Sculley, who was in Singapore last week to speak at the Chief Information Officer Executive Summit organised by the IT Management Association.

"They are already doing that, but they can do it on a larger scale," he added.

Mr Sculley, 74, was Apple's chief executive from 1983 to 1993, during which he oversaw a tenfold increase in its sales as well as the boardroom revolt that famously ousted Apple co-founder Steve Jobs.

But he continues to be a staunch defender of the tech giant.

Dismissing talk of Apple being mired in the doldrums, he said it will likely see a "fan bounce" in the next year when it releases new products.

Apple has legions of fans who insist on having its "latest and greatest", which sets it apart from its competitors, he said. "Apple always does best when it sells to the people who love it," he said.

With current chief executive Tim Cook promising that there will be new products on the way, Mr Sculley said, "my guess is Apple is going to have a great 2014".


Get a copy of Digital Life, The Straits Times or go to straitstimes.com for more stories.

VIDEOS TO WATCH

SERVICES