
I've been arguing back and forth with a number of noted voices in the technology community about whether Apple is really going to bring out a cheap iPhone – and it's fair to say opinion is divided.
For those that haven't seen, this eternal brouhaha has been brought to the surface once more by the Wall Street Journal's claim that people 'briefed in the matter' told it that plans to bring out a lower-cost handset are progressing.
This would allow Apple to compete with the budget handsets that are powering through developing nations, into the hands of those seeking to jump on the smartphone bandwagon now they can afford to do so.
However Phil Schiller chatted to the Chinese paper Shanghai Evening News, and surprisingly spoke candidly on the subject of budget smartphones. He said that cheap smartphones would never be Apple's product development direction. "Although Apple's market share of smartphones is just about 20 per cent, we own 75 per cent of the profit," he added.
Cheap = bad?
Some people have speculated that a cheap iPhone would use lower-cost materials, something that Schiller took exception to. He noted that with things like the Retina display or aluminium chassis show that Apple will always look to the higher-end of the materials to bring the Apple 'ethos' to its products.
The issue Apple is going to have to face is that the smartphone market is set to change rapidly in the next few years, evolving into an almost unrecognisable user base.

There's no doubt that the emerging market is going to be a crucial battleground for manufacturers. IDC predicts that while the market share for Android will stagnate over the next few years, this isn't a bad thing given the user base will be an order of magnitude higher by 2016.
Apple, on the other hand, will see its hold on the market shifted somewhat as the likes of Windows Phone make inroads to the developing nations; already Nokia has seen modest success with its low-cost Lumia range in China, and the trend is continuing around the world.
"We believe that the high-end smartphone market (above $400 USD off contract) for [calendar year 2013] will be about 320 million units, of which we believe Apple will capture 50% market share," Gene Munster, analyst at Piper Jaffray, said.
"We believe this means Apple is missing the other 65% of the market, or 580 million units, given its current product lineup without the lower priced phone."

China bright
China is a smartphone market that many are talking about as a key battleground in the near future, and that makes sense given its economy is growing at a rapid rate.
Samsung is currently leading the way in this region, although Lenovo - a relatively unheard of brand in the handset space outside of its native China - is intent on taking that slot away. Apple has around 80% less market share than Samsung, albeit with only three of its six-strong iPhone range actually launching in the country and it still hasn't offered a model that can run on 3G networks, which would clearly hold back sales.

So it would seem to the outsider that Apple would be mad to ignore such an opportunity, right? After all, it's got more cash than Scrooge McDuck many times over, so bringing a phone that costs $100, has the Apple logo on it and runs a watered down version of iOS is an easy win in the eyes of many.