Apple Inc. (NASDAQ:AAPL) CEO Tim Cook defended the iPhone 5C in an interview with Bloomberg, explaining that the company has never been interested in producing cheap electronics.
Apple is not in junk business
“There’s always a large junk part of the market,” Cook said. “We’re not in the junk business.”
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A lot of the speculation about the iPhone 5C coming in at $400 or even less was based on the idea that Apple Inc. (NASDAQ:AAPL) wanted to compete with Google Inc (NASDAQ:GOOG)’s Android OS over the entire mobile market, but Apple Inc. (NASDAQ:AAPL) has never competed with budget brands in the past, and there was never any reason to assume that it would start now.
Apple’s product pricing
Apple Inc. (NASDAQ:AAPL)’s offer has always been a well-designed, trendy product for a hefty premium. iPods, MacBooks, and iPhones are all expensive relative to the competition, but people buy them anyways. Even when the company was struggling in the 1990s, it never wavered from its strategy of producing premium computers, and maintained a following among graphic designers and artists.
It’s true that Android is taking larger and larger chunks of the total mobile market, but that includes the mid-to-low end that Apple Inc. (NASDAQ:AAPL) frankly doesn’t care about. Cook says that he wants to “compete like crazy” for high-end customers, and that he isn’t worried about low-end electronics or day-to-day changes in stock price.
Apple’s strategy for phone and tablet market
“Fortunately, both of these markets are so big, and there’s so many people that care and want a great experience from their phone or tablet, that Apple Inc. (NASDAQ:AAPL) can have a really good business,” he said. As one of the most profitable companies in the world, it’s hard to argue that the strategy hasn’t worked, and recent comparisons in the media with Kodak and other failed IT firms seem overblown.
Apple Inc. (NASDAQ:AAPL)’s Head of Design Jony Ive, and Software Chief Craig Federighi, also took part in the interview, and Ive told Bloomberg that it’s Apple Inc. (NASDAQ:AAPL)’s relentless attention to detail that convinces people to spend more on their products and that inspires such strong brand loyalty. “I do think that we sense when somebody has cared,” Ive said. “And one thing that is incontrovertible is how much we’ve cared.