DEBATE: Should Apple produce a cheaper iPhone to stem the decline in sales?

Should Apple produce a cheaper iPhone to stem the decline in sales?

Carolyn Dailey, founder of Creative Entrepreneurs, says YES.

Apple has been missing out on a huge opportunity to increase sales, keep ahead of the competition, and build brand loyalty with key audiences that can’t currently afford an iPhone. These include students, freelancers and startup entrepreneurs, and people working across the creative sector – the fastest growing sector in the economy.

At Creative Entrepreneurs, we work directly with these people and see on a daily basis how they make the decision that, on limited budgets, iPhones are a “nice to have” that will have to be done without while they bootstrap their careers and startup companies.

We see a lot of Androids and other brands in our world, gobbling up what could have been sales for Apple, if it would only drop the iPhone price.

Bigger picture, these are the same audiences who are building some of the most exciting, disruptive companies in the world and who will be the innovators and thought leaders of tomorrow. It’s a short-sighted mistake for Apple to ignore them, cut from the same cloth as Steve Jobs himself.

Carrie Osman, chief executive and founder at technology commercial strategy firm Cruxy & Company, says NO.

Pricing is a weapon. This is something that firms often neglect – they leave pricing to chance or accept a race to the bottom.

That cannot be said of Apple, which has always anchored the iPhone at a high price point to reflect what the brand stands for and the product promise of the technology. Yes, the price acts as a barrier to mass adoption – but that is exactly what it should do.

Apple should focus on driving the market by innovating the iPhone so that it can sustain a high price. The iPhone has always had features that have created barriers to entry and meant it is “inelastic” – with a high price point sustaining solid demand.

The pricing petitions in the market are shifting, with players such as Huawei entering the competition at the lower end, and this is changing the market dynamics. That’s why Apple should reassess the product and what it takes to stay in the high price bracket.

Lowering the price would be popular, but popular is not always right.