During Tim Cook’s first quarterly earnings call as stand-in Apple leader yesterday afternoon, he was asked about the possibility of an iPhone nano. Tim killed the idea immediately: “You know us, we’re not going to play in the low-end voice phone business. That’s not who we are. That’s not why we’re here. We’ll let somebody do that, our goal is not to be the unit share leader in the phone industry. It is to build the best phone.”
His statement should bring to a close the spate of rumors and purported leaks–most recently from some iPhone case manufacturers who claimed to have specs on the device–especially as it’s on the heels of a very similar statement by Steve Jobs in the October financial call. And it underlines a policy of high-level design that runs right through the Apple product line-up: Apple’s products slot in at the medium to upper end of capability, but not at the lower price brackets.
But Cook did say that the company’s iPhone pricing policy might adapt. In reference to subsidized versus non-subsidized overseas markets, Cook noted that sales were depressed in the non-subsidized ones. Apple is however “constantly evaluating the best way to play in these markets. We know there’s a huge opportunity here, and we will make adjustments in the future there to play in a better way.” That’s an admission that iPhone pricing might change to improve sales in slow-selling markets.
Later, the topic of a low-end Apple netbook-like machine was raised, and Cook’s response was equally direct: “We’re watching that space, but right now from our point of view, the products in there are principally based on hardware that’s much less powerful than we think customers want, software technology that is not good, cramped keyboards, small displays.” It seems that Apple is predicting the netbook phenomenon in its current guise of cheap, low-powered ultraportables is just a fad.
When the computing power inside netbooks rises, however, Apple may step in. Jobs admitted as much in October, saying, “we’ll wait and see how that nascent category evolves, and we have got some pretty interesting ideas if it does evolve.” It’s worth noting that numerous people have successfully modded netbooks to run Mac OS X, and the OS really does run on the tiny machines quite well–the performance is just not up to Apple’s high standards. For exactly the same reasons, Apple has deemed Flash an unnecessary burden on the iPhone’s processor and hence battery life, and that’s why it’s not found running on the smartphone.
Ending these two rumors is big news for Apple because these products are among the most obvious expansions to Apple’s current line up, and the it’s rare for the company to address any sort of speculation about its products. While Mac Mini and Apple TV rumors exist, those two products are simply in need of a refresh. The only remaining “fresh” product rumor is the 15-inch MacBook Air.
Apple is clearly under no pressure to expand its products into lines it’s deemed unfavourable–during the earnings presentation Apple revealed profits of $1.61 billion for the quarter up to December 2008, beating expectations. The boost was pushed by an increase in sales of Macs–up 9% year on year–and sales of 4,363,000 iPhones, up 88% on the previous year, thanks largely to the global availability of the iPhone 3G versus the original model. While quarter to quarter numbers were actually slightly depressed–almost certainly paralleling downturn in consumer electronic goods spending–it looks like Apple’s in a good position to weather the economic storm, and choose exactly how it wants its products to hit the market while doing so.