'iPhone SE' rumors spark hopes that Apple will continue to sell iPhone 5s at $350 or less

AppleInsider

Analysts on Wall Street expect the new 4-inch "iPhone SE" may be priced at $450, taking the place of the entry-level iPhone 5s. But if Apple were to keep the iPhone 5s around at a cheaper price, it could allow the company to tap into new markets.

Gene Munster of Piper Jaffray said this week he believes Apple could "experiment with excess stock inventory," pricing the iPhone 5s at between $250 and $350. Such a move could be geared toward gaining share in emerging markets like India, Brazil and Russia.

Analyst Rod Hall of J.P. Morgan weighed in with a similar sentiment, telling investors he hopes Apple will drop the entry-level pricing on its iPhone lineup down to $350 following the debut of the "iPhone SE."

Hopes for even lower pricing on the iPhone to grow market share are not new, particularly on Wall Street. But such a move wouldn't be entirely unprecedented either.

Apple previously took a similar approach with the iPhone 4s, continuing to sell it in some countries after it was discontinued across most of the globe. It has not, however, shown interest in offering an ultra-low-cost iPhone in established markets like the U.S.

In a move perhaps setting the stage for the "iPhone SE," Apple finally discontinued the iPhone 4s, as well as the iPhone 5c, in India last month. Prior to that, the iPhone 4s was priced at just Rs. 12,000, or about $175, helping to make it the most popular device in Apple's local lineup.

The iPhone 5s is currently Apple's cheapest handset in India, with its price cut in half in December to Rs. 24,999, or $372.

Apple is set to hold an event on March 21 where it is expected to unveil a new 4-inch iPhone featuring updated internal components, including support for Apple Pay. This month's event will serve as something of a stopgap leading into September, when Apple is rumored to unveil a full-fledged next-generation "iPhone 7."

dachar

sog35 said:

These clowns will never give up the fantasy of Apple selling cheap crap.

Are you saying the iPhone 5S is rubbish? The analysts may have got the pricing wrong but in the past Apple have sold older models at reduced prices such as  the 4S, so there is nothing wrong with continuing the price reduction idea with the 5S if a new model replaces it.

As noted before there are many of us who do not want a phone bigger than the 5 Series and who have not renewed our iPhones because we do not want the larger 6 Series. The introduction of the new 4 inch iPhone is important because Apple will need to make decisions on how far to upgrade the hardware and how the pricing fits in with the established 6 and 6S models. 

blastdoor

With the A5 in the 4s, the hardware finally caught up to the software -- the basic user experience with the 4s is much better than with the 4.

With the A7, the hardware leapt ahead of the software by a pretty big margin -- aside from screen size, the basic user experience with an iPhone 6 isn't noticeably different from the 5s. 

This means the 5s can stick around for much longer as a perfectly credible product. 

blastdoor

sog35 said:

These clowns will never give up the fantasy of Apple selling cheap crap.

You think the 5s is crap?

mike1

dachar said:

sog35 said:

These clowns will never give up the fantasy of Apple selling cheap crap.

Are you saying the iPhone 5S is rubbish? The analysts may have got the pricing wrong but in the past Apple have sold older models at reduced prices such as  the 4S, so there is nothing wrong with continuing the price reduction idea with the 5S if a new model replaces it.

As noted before there are many of us who do not want a phone bigger than the 5 Series and who have not renewed our iPhones because we do not want the larger 6 Series. The introduction of the new 4 inch iPhone is important because Apple will need to make decisions on how far to upgrade the hardware and how the pricing fits in with the established 6 and 6S models. 

It's not the fact that the phone might drop in price as Apple has always done, but by the incessant view by some that they need to offer a "cheap" phone. If Apple follows their pattern, the original iPhone 6 would become the entry level phone in the Fall. Those who clamor for the "cheap" phone always cite developing markets. Fact is, those markets overwhelmingly want and purchase larger screens as their phone is often their only device.

In addition, I wuld seriously doubt that Apple could ever remove enough cost from the 5S to PROFITABLY sell it for $350. There is a floor to how inexpensively they can make that phone.

iSRS

blastdoor said:

With the A5 in the 4s, the hardware finally caught up to the software -- the basic user experience with the 4s is much better than with the 4.

With the A7, the hardware leapt ahead of the software by a pretty big margin -- aside from screen size, the basic user experience with an iPhone 6 isn't noticeably different from the 5s. 

This means the 5s can stick around for much longer as a perfectly credible product. 

I agree. the 5s was the first 64 bit iPhone, IIRC. This gives it a much longer life. Keep in mind, this is a 2013 phone, and they just recently stopped selling the 2011 iPhone 4s in some countries. If the 5s takes the price place of the 4s, that is a huge improvement for those folks.

rogifan_new

mike1 said:

dachar said:

Are you saying the iPhone 5S is rubbish? The analysts may have got the pricing wrong but in the past Apple have sold older models at reduced prices such as  the 4S, so there is nothing wrong with continuing the price reduction idea with the 5S if a new model replaces it.

As noted before there are many of us who do not want a phone bigger than the 5 Series and who have not renewed our iPhones because we do not want the larger 6 Series. The introduction of the new 4 inch iPhone is important because Apple will need to make decisions on how far to upgrade the hardware and how the pricing fits in with the established 6 and 6S models. 

It's not the fact that the phone might drop in price as Apple has always done, but by the incessant view by some that they need to offer a "cheap" phone. If Apple follows their pattern, the original iPhone 6 would become the entry level phone in the Fall. Those who clamor for the "cheap" phone always cite developing markets. Fact is, those markets overwhelmingly want and purchase larger screens as their phone is often their only device.

In addition, I wuld seriously doubt that Apple could ever remove enough cost from the 5S to PROFITABLY sell it for $350. There is a floor to how inexpensively they can make that phone.

Some believe Apple will have no choice in India because the culture isn't like China. 

martinworld

Apple sold iPods at affordable price points, so why not the phones? The problem is that $350 is still expensive for older model phones with meagre and unexpandable storage.

robertwalter

I was going to comment that I don't see Apple continuing to sell non-NFC equipped iPhones, because Pay, but just realized:  The 5s is a great little phone, and a bargain at 350$; it would allow a person to use the savings between it and the more expensive NFC-equipped iPhones to defray the purchase of an Watch. 

mac_128

I've been saying this since the 5se rumors started. If Apple makes a low budget phone, they'll price it below $450, so they can drop the 6 down into that same $450 entry-level target. So a 4" screen would have to be less.

however, I don't believe Apple will sell an iPhone without Pay in the US, or likely any developed country. Most likely the 5s will continue to be sold in emerging markets like India, where hey just discontinued in February both the 4s and 5c.

next year the so-called 5se will drop to the $350-400 level in the US. But not this March.

dachar

mac_128 said:

I've been saying this since the 5se rumors started. If Apple makes a low budget phone, they'll price it below $450, so they can drop the 6 down into that same $450 entry-level target. So a 4" screen would have to be less.

however, I don't believe Apple will sell an iPhone without Pay in the US, or likely any developed country. Most likely the 5s will continue to be sold in emerging markets like India, where hey just discontinued in February both the 4s and 5c.

next year the so-called 5se will drop to the $350-400 level in the US. But not this March.

The point you make about Apple Pay is interesting and again shows how getting the hardware specification and price right on a new 4 inch iPhone may be more challenging for Apple. It will easier if apple have two 4 inch models but if they stop sealing the 5S then it will be difficult to pitch the replacement right at both newer and more established markets.

qwwera

When the 5E is released, the 5S goes away.

It makes no sense whatsoever to keep it in the lineup. To keep a factory churning out the exact same case and selling it at a discount when they could sell it at preexisting price points.

levi

I believe Mark Gurman already shot this down - i.e.
 5s to be discontinued. For what it's worth, I hope he's wrong. 5s at reduced price would be a good fit in some emerging markets, India specifically. It certainly won't hurt margins. Also $250 is still a premium price in many parts of the world. 

fallenjt

dachar said:

sog35 said:

These clowns will never give up the fantasy of Apple selling cheap crap.

Are you saying the iPhone 5S is rubbish? The analysts may have got the pricing wrong but in the past Apple have sold older models at reduced prices such as  the 4S, so there is nothing wrong with continuing the price reduction idea with the 5S if a new model replaces it.

As noted before there are many of us who do not want a phone bigger than the 5 Series and who have not renewed our iPhones because we do not want the larger 6 Series. The introduction of the new 4 inch iPhone is important because Apple will need to make decisions on how far to upgrade the hardware and how the pricing fits in with the established 6 and 6S models. 

Have Apple ever sold any iPhone at $350? These WS idiots forgot that Apple ain't care about market shares but profit margins. Race to bottom never win. I don't see why Apple release a new handset to sell at the same price as 3-year old iPhone (5S is currently at $450). Apple, in no rush to slash price on 5S another $100 after 6 months only...no, I don't see that happening. I predict 5S will stay as is until it's discontinued in Fall while this new 4" iPhone is priced at $550 until next year or at least Fall.

fallenjt

martinworld said:

Apple sold iPods at affordable price points, so why not the phones? The problem is that $350 is still expensive for older model phones with meagre and unexpandable storage.

Profit margins! iPods are not iPhones which are Apple bread and butter. Apple can sell iPod at low margin because of the low volume. The BOM cost is not that much different between 5S and 6S...I would say $50 at most. So, selling 5S at almost 1/2 price of 6S is more than just stupid ...financially!

fallenjt

qwwera said:

When the 5E is released, the 5S goes away.

It makes no sense whatsoever to keep it in the lineup. To keep a factory churning out the exact same case and selling it at a discount when they could sell it at preexisting price points.

It may in US, not other countries or maybe, it's still hanging in there since the new 4" iPhone is priced at $550, $100 higher than 5S. Look, the new 4" iPhone with 6S specs except 3-D Touch is well worth $100 premium over 5S.

schlack

what's wrong with these people? this phone will introduce between $550 and $650. it's not a budget phone. it's a smaller screened 6S.

rogifan_new

I honestly couldn't care less about this 4" iPhone. Where is Apple's version of Amazon Echo? And why does Siri still suck in so many ways? It's sad to me that Amazon came out with a product like this before Apple did. 

macplusplus

fallenjt said:

martinworld said:

Apple sold iPods at affordable price points, so why not the phones? The problem is that $350 is still expensive for older model phones with meagre and unexpandable storage.

Profit margins! iPods are not iPhones which are Apple bread and butter. Apple can sell iPod at low margin because of the low volume. The BOM cost is not that much different between 5S and 6S...I would say $50 at most. So, selling 5S at almost 1/2 price of 6S is more than just stupid ...financially!

Apple doesn't think that way with such a margin fetishism. Their concern is (or should be) rather "how many other Apple products can we sell to that individual alongside that iPhone model".

I am stopping those who intend to buy 6 series, telling them "wait, 5s will be halved and you'll be able to buy both the 5s and the new iPad Pro or an Air 2 alongside". Who cares Apple Pay?. it is not a must. iPad is a must.

josu

sog35 said:

blastdoor said:

You think the 5s is crap?

No it isn't. I still own a 5s with my 6+

But Apple can't sell 5s for $350 and make any decent profit. That's what Android does.  Sell alot of cheap product with no profit.

Are you sure, the tooling is paid off, and the components must be dirt cheap by now.

Anyway this is the second time analysts say this. Ming-Chi-Kuo said that a couple of weeks back, and he give even a lower price, $225. I am with you on this to a certain point. I don't think Apple will keep the 5s in developed markets, but they will keep it in emerging markets where they can price it as a more affordable for the general income level of those countries, but still be a cut above from the general smartphone market in those places. And India has been the market in which they have tested these tactic in late 2015. There it will not be $225 or $350 for that matter, in those countries prices are much higher than in developed markets, not to say relative to the income of the middle clases there, so still expensive enough to justified its premium status there.

cash907censored

sog35 said:

These clowns will never give up the fantasy of Apple selling cheap crap.

Cheap maybe, but the 5s is hardly "crap," Sog.