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John Sculley jumps on the cheap iPhone bandwagon

January 16, 2013: 11:51 AM ET

Former CEO says an inexpensive smartphone is the key to emerging markets.

1984_jobs_and_sculley.homeFORTUNE -- Ex-Apple CEO John Sculley says that the company has to produce a cheap iPhone model if it wants to make a dent in emerging markets.

You may remember Sculley as the man who nearly destroyed Apple (AAPL) in the 1990s. Sculley led the palace coup that ended in Steve Jobs' ouster. (In somewhat bitter remarks, Jobs reminisced on the episode here.)

Sculley made the comments on a Bloomberg Television interview, after Apple's stock sunk to below $500 a share—its lowest in nearly a year. "Apple needs to adapt to a very different world," he 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."

MORE: Apple's most famous villain now $500

Analysts have been pushing the idea of a cheaper phone for some time now. But, Apple so far has nixed the idea. Demand for the current generation iPhone 5 at home doesn't seem to be much affected.

Sculley pointed to Samsung as a real threat to Apple, especially now that its devices have come up in quality and desirability. (Google (GOOG) bares responsibility for that as well.) He conceded that there was "nothing wrong" with the current iPhone, though he neglected to say whether a cheaper phone should be sold in developed markets like Europe and the US.

Is the man who once sought to "tone down the sass and develop products that are less dazzling than predictable" at Apple right?

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