MYSTERY: Did Apple Exec Phil Schiller Really Shoot Down A Cheap iPhone?

Welcome to the land of insanity.

Here we will talk about the latest report, or in this case, perhaps, misreport about Apple. It's a bit in the weeds, so be patient as we walk through this one.

The big story in the land of Apple this week is that it's working on a cheap iPhone. DigiTimes, the Wall Street Journal, and Bloomberg all says Apple has a less expensive iPhone in the works for this year. Of course, they've been saying this for a long time! So who knows if they're right this time.

Apple is getting smoked in developing markets because the iPhone is so expensive. A cheap iPhone could help fix that. But it runs contrary to Apple's DNA, which is to make high-quality, high-priced items.

Apple's SVP of marketing Phil Schiller did an interview with the Shanghai Evening News this week. He was asked about the cheap iPhone. He seemed to shoot it down. But, there's a twist. His interview may have been misinterpreted.

Apple has confirmed that the interview happened to The Next Web. What Apple has not confirmed, it seems, is exactly what Schiller said.

The Next Web translated the interview and came up with this:

“At first, non-smartphones were popular in the Chinese market, now cheap smartphones are more popular and non-smartphones are out,” Schiller added later. “Despite the popularity of cheap smartphones, this will never be the future of Apple’s products. In fact, although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit.”

We had our own native-Chinese speaker look at the story yesterday. She's not a native English speaker, so her translation was a little rough:

Schiller said, every new product created by Apple, Apples thinks about using the best techniques, which including production process, retina screen, aluminum alloy one molding etc. , providing a best product for the market. "We don’t, like other companies, launch several products around the same time, then which customers will like one of those products. There are around 700 thousand apps that can be used in the Apple smart phones. Our competitors launched new products with several size options, but after people bought their products, they found out, there are no suitable software for them, which have poor user experience." During the interview, he emphasized the user experience many times, and believed the key success of Apple is the user experience.

There are rumors that Apple will use the lower-end product with lower price to capture the market share. Shiller said, “In Chinese Market, there are a lot of people using functional machines. Now some manufactures are trying to use the cheap smartphone to replace the functional cellphone. However, this is not the develop trend of Apple product. Actually, although Apple only has around 20% market share, in the smartphone market, it took over 75% market profit."

We reached out to Apple for clarity about exactly what Schiller said. We didn't hear anything back.

The Next Web story went viral yesterday with just about every major and minor news organization picking up on Schiller's comments.

Then a funny thing happened this morning. Reuters retracted its story based on the Shanghai Evening News. Under the headline, "Apple dismisses cheaper iPhone story withdrawn," Reuters wrote:

Reuters has withdrawn the story headlined "Apple exec dismisses cheaper phone as a market share grab-report" which was based on a Shanghai Evening News report that was subsequently updated with substantial changes to its content.

No replacement story will be issued.

This is very unusual! And the baffling thing is that the original story doesn't appear to have had any major changes. Everyone is looking for the changes, and they can't find anything.

So, what is going on here in the land of insanity?

Well, for one, we're all way too obsessed with what Schiller did or did not say and what it does or does not mean. Apple was led by Steve Jobs the master of saying one thing and meaning another. If you think you can figure out what Schiller was really saying, even after a translation from Chinese, kudos to you!

If Reuters is pulling its story and not replacing it, it suggests something significant has been lost in translation and Schiller's dismissal of a cheap iPhone might not have happened at all.

None of this would be necessary if Apple just told the dozens of reporters emailing asking exactly what Schiller said. For some reason, that's not how Apple chooses to do its business.

And thus, here we are. Guessing about what a translation of its SVP of marketing means about the future of the company's core business.