Ex-CEO John Sculley says a budget iPhone is a must for Apple

More competition = cheaper iPhone, Sculley says

iPhone 5 hands on

Apple's former CEO John Sculley says the company will have to make a cheaper iPhone if it wants to compete with the likes of Samsung.

So it looks like our own Gareth Beavis is in good company.

Sculley told Bloomberg that Apple needs to change its high-end approach, because of greater market saturation. "Apple needs to adapt to a very different world," he said. "As we go from $500 smartphones to even as low, for some companies, as $100 for a smartphone, you've got to dramatically rethink the supply chain and how you can make these products and do it profitably."

Greater competition

The problem is that the competition is now so fierce, according to Sculley. Rivals like the Samsung Galaxy S3 are viable alternatives to the iPhone now, whereas before Apple's UI was light years ahead.

Android's huge (and growing) market share is down to the fact it offers handsets at a range of prices, too. And considering the fact most of the growth in mobiles will be in developing markets, with low-end devices, Apple would be wise to start offering a budget alternative, Sculley reckons.

"Samsung is an extraordinarily good competitor," he said. "The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see."

Via BGR