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Ex-Apple CEO Sculley supports budget iPhone

Whether or not Apple is readying a low-cost iPhone for emerging markets around the world has been a topic of discussion among the tech community recently. Now, former Apple CEO John Sculley has chimed in with a vote in favor of the rumoured device.

Apple has seen much of its success to date in developed regions like the US and Europe, where the smartphone market is becoming saturated. To continue growing, the company will now need to turn to emerging markets like India, where price points are "dramatically different," Sculley said today in a Bloomberg Television interview from Singapore.

"There's only 4 per cent penetration of smartphones in India at this time against almost 50 per cent in the United States," he said. "As people start to adopt these products in emerging markets ... there's bound to be new price points. That requires really re-thinking the whole supply chain and how you price and how you make money."

Analysts for years have been saying that Apple is working on a cheaper iPhone for emerging markets. Rumours began heating up last week following a Digitimes report that claimed the Cupertino firm was planning to roll out a low-cost iPhone in China and other regions in the second half of 2013. One analyst predicted that the device could generate $6.5 billion ($4.06 billion) in revenue for Apple this year.

There were then reports that Apple execs said the company was not preparing a low-cost iPhone, but the Shanghai Evening News, which published that report, later revised its story and backtracked on Phil Schiller's flat-out denial. Rather than quoting him as saying that Apple "will not push a cheaper smartphone," the paper now quotes him as saying that Cupertino "will not blindly pursue market share," Reuters reported.

Sculley said today on Bloomberg that rival phone maker Samsung poses the biggest challenge to Apple. The Korean electronics giant is making phones, such as the uber-popular Galaxy S3, that are on-par with the iPhone, he said.

"Apple has now a real competitor, and it's got to learn how to sell products that are priced for the price point that the emerging middle class in Asia, for example, can afford," Sculley said.

Though the iPhone remains the most coveted smartphone among prospective buyers in North America, demand for the device has waned since the iPhone 5 made its debut, according to a recent survey from 451 Research's ChangeWave service. Recent reports indicate that Apple slimmed down iPhone component orders amidst that sluggish demand.