CUPERTINO, Calif. (AP) — Apple's earnings are falling, partly because the company is selling more of its less expensive, older iPhone 4s instead of the latest version. Like the iPhone 5, the preceding two generations of models can run on Apple's latest operating system, the iOS 6.
Sell cheaper smartphones cuts into the Cupertino, Calif., company's profit margins, but Apple Inc. CEO Tim Cook says he thinks it may be a worthwhile sacrifice if its gets the devices into the hands of people in less affluent countries who lack the money to pay more.
Cook shared some of his thoughts on the subject Tuesday during a conference call reviewing the company's fiscal third-quarter earnings.
QUESTION: You talked about more affordable pricing .... Can you confirm that was just with the iPhone 4?
ANSWER: What we've seen is that the number of first-time smartphone buyers that the iPhone 4S is attracting is very, very impressive. We want to attract as many of these buyers as we can. We saw that beginning to happen toward the end of the (fiscal second quarter ending in March) timeframe, as I referenced on last quarter's call.
We did that on a wider spread basis, offered the more affordable pricing on a wider scale basis this quarter and continue to be very happy with what we saw. You know, where iPhone 5 continues to be the most popular iPhone, by far, we are really happy to provide an incredible, high-quality product with iPhone 4 running IOS 6 to as many first-time smartphone buyers as we can. I think it's proven to be exactly a great product for that buyer.