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“Apple needs to adapt to a very different world,” Sculley 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.”
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According to Sculley, the big problem for Apple isn’t so much that its own smartphones have gotten worse but that its rivals have done a good job of catching up over the past couple of years. So while the iPhone was the only game in town for people who wanted a top-notch touchscreen smartphone four years ago, rivals such as the Galaxy S III are now providing similar quality and are eating into Apple’s market share. And when you couple this with the fact that Samsung also has a very strong strategy for selling lower-cost smartphones in emerging markets, then you can understand why Apple may want to develop a cheaper smartphone of its own.
“Samsung is an extraordinarily good competitor,” Sculley said. “The differentiation between a Samsung Galaxy and an iPhone 5 is not as great as we used to see.”
This article was originally published on BGR.com

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