Apple Unlikely To Sell Cheaper Computers

Apple chief executive Steve Jobs on Tuesday said the company is unlikely to start selling low-priced computers, despite the global economic slowdown, and has no plans to enter the emerging mini-notebook market or to build a variety of iPhone models.

Jobs made an unusual appearance at the teleconference the company holds with financial analysts after releasing quarterly earnings. Apple on Tuesday reported that profits rose to $1.14 billion in the fiscal fourth quarter ended Sept. 27, as sales increased 27%, driven primarily by iPhone and Mac computer sales. The company also said that it had surpassed during the quarter its goal of selling 10 million iPhones this year.
In answering analysts' questions, Jobs said the company is prepared for the economic slowdown with a loyal customer base that's likely to delay purchases rather than turn to competitors, a successful product portfolio that offers strong value for the money, and $25 billion in the bank.

While Apple could get "buffeted around by the [economic] waves a bit," Jobs said he was confident the company would do well in the slowdown. "I think this economic downturn will present some extraordinary opportunities for companies with cash," he said.

Asked whether he would consider returning some of the cash to investors, Jobs dodged the question, but indicated that the company would prefer to invest the money in its business during the downturn. "It's not burning a hole in our pockets," Jobs said of the money stash. He also declined to say whether Apple would use the money for acquisitions.

As to selling cheaper computers to attract consumers with thinner wallets in a slow economy, Jobs said that wasn't a strategy the company would pursue, preferring instead to beat the competition on features within the high-end market.

"What we want to do is deliver an increasing level of value for customers," he said. "We don't know how to make a $500 computer that's not a piece of junk, and our DNA won't let us do that."

One new market Apple would stay out of for the time being is for so-called "netbooks," defined as sub-$500 notebooks with displays 10 inches or smaller and running a full PC operating system. Most of the major PC makers are offering such machines as second or third computers for people looking to check e-mail or browse the Web on the road.

"That's a nascent category that, the best that we can tell, not a lot is being sold," Jobs said. "We'll wait to see how that nascent category evolves, and we've got some pretty interesting ideas if it does evolve."

In the meantime, Apple has the iPhone, which can browse the Web from anywhere on a cellular network and fit in your pocket, Jobs said. Asked whether he would consider making a variety of models, like other mobile phone makers do with their products, Jobs said Apple plans to stay with one iPhone and make it a strong platform for software that would differentiate the product from rivals'.
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