Why Apple is announcing a new 4-inch 'iPhone SE' in March

Posted:
in iPhone edited March 2016
For Apple, 2016 is already shaping up to be an unprecedented year, with the company set to launch an entirely new iPhone model earlier than ever. Here are a few key reasons why this is a wise move.




A mid-cycle sales boost



Apple has already said that iPhone sales will decline for the first time ever this quarter. Simply put, the astronomical growth posted by the iPhone 6 a year ago made for a difficult comparison, and the iPhone 6s won't be able to keep pace.

But Apple has had a plan in its back pocket all along: the "iPhone SE."

By releasing a mid-cycle iPhone replacement, Apple can provide a boost to sales at a time when many consumers start waiting for the next-generation iPhone. A March upgrade helps to disrupt some of the seasonal trends that affect Apple's sales.

While the imminent launch of the "iPhone SE" probably won't do much for the current March quarter, Apple will reap the benefits from sales of the new 4-inch model throughout the June and September quarters, right up until the "iPhone 7" launch. That should help offset any tough comparisons for the iPhone 6s, and keep iPhone sales growing.

It's a new strategy for Apple, which has largely stuck to the same annual release cycle with one annual upgrade.




Apple, of course, tried introducing a new lower-end phone before in the form of the iPhone 5c. But it launched at the same time as the iPhone 5s, and in hindsight may have been overshadowed by the flagship iPhone 5s.

Spacing out the launch of the "iPhone SE" and giving it some distance from both the iPhone 6s and the "iPhone 7," however, may give it more of an opportunity to hit its target market.

Appeasing the (still sizable) smaller phone crowd



And what is the target market for the "iPhone SE?" Most likely it's users who don't like the larger form factors of the 4.7 and 5.5-inch iPhones.

For years, Apple refused to cater to the growing market for jumbo-sized phones. In fact, it marketed the size of the 4-inch iPhone 5 and 5s as an advantage over competitors.

In one 2012 commercial entitled "Thumb," Apple -- with the help of celebrity narrator Jeff Daniels -- showed how the 4-inch display on the iPhone 5 could be use with one hand. At the time, Apple portrayed the screen size as a "dazzling display of common sense."



When Apple eventually caved in to the larger smartphone trend, the company included a feature it calls Reachability, which allows users to quickly tap (but not press) the home button twice. Doing so brings the screen down to half size, allowing users to reach elements from the top of the display without needing to readjust or use a second hand.

Despite the inclusion of Reachability, there are still many customers who feel that the 4-inch form factor of the iPhone 5 and iPhone 5s is more convenient than the larger 4.7-inch screen size of the iPhone 6s and iPhone 6.

Heck, even Apple itself thought the 4-inch size was superior back in 2012. So it's no surprise that the company has no plans to abandon it.

An iPhone that's built to last



If the latest rumors are accurate, the "iPhone SE" will be a formidable device from a hardware perspective, featuring the same 12-megapixel camera and A9 processor as the iPhone 6s.

That would suggest Apple isn't planning the new 4-inch model as an entry-level model, but more of a mid-range handset. With an A9 chip, the "iPhone SE" would outperform the A8 chip in the iPhone 6, which sells starting at $549.




Why would Apple put the A9 chip in a 4-inch phone? One possible answer is that Apple wants to make sure it can last in its lineup, potentially for longer than the typical one-year span between upgrades.

Apple already uses a similar approach with its iPod touch lineup, choosing to update the hardware on a less frequent basis.




Last July, Apple revamped the iPod touch with an A8 processor --?the same chip found in the iPhone 6. At the time, that was Apple's flagship smartphone, meaning the new $200 iPod touch had more processing horsepower than a then-$549 iPhone 5s.

In short, putting the A9 in the "iPhone SE" would be a win for everybody. It would give Apple the flexibility to keep the handset in its lineup for awhile, and it would give customers the latest and fastest Apple hardware in a smaller form factor.

Don't forget lower price points



No, it's not going to be the mythical "low-cost iPhone" that many on Wall Street have clamored for. But the "iPhone SE" will likely help boost sales in a price segment where Apple already competes.

The main difference is, with a complete hardware refresh, customers may be more likely to view a $549-or-under iPhone.

Right or not, the stigma of buying "last year's phone" is very real with consumers. But a brand new handset at that price point might be more appealing than simply keeping around an older model.

We don't know exactly how much the "iPhone SE" is going to cost, but it's safe to say it won't drop below the current $449 price of the iPhone 5s. It's also unlikely to go beyond the $549 price of the iPhone 6. Somewhere in that price window is the potential for Apple to carve out a sizable, loyal segment of customers.
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Comments

  • Reply 1 of 52
    wonkothesanewonkothesane Posts: 1,342member
    Maybe it's just me, but due to the  perception of a growing trend to tie features to screen size, I feel exactly opposite in that I don't know which of the models released this year might be the best pick.

    Granted,  on the MacBook Pro side of things they kind of broke the once-a-year update cycle such that - unless you know for sure that a major update is coming - any time is a good time to buy a MacBook Pro. 
    So it might be part of a strategy to discourage people from waiting for the next major release and just buy what's currently on the market.
  • Reply 2 of 52
    tmaytmay Posts: 3,530member
    ApplePay, Apple Watch compatibility is all that it needs to be "a premium" iPhone, and the A9 gives it an extended service life.
    Looks like all that is given up is the 3D Touch.

    For the record, I do have a friend still on the iPhone 1 just because it still works for her. Had to have a new battery a couple of years ago. I still have my iPod Touch 1 which has the same screen size / configuration. I would be surprised if Apple couldn't build a 3.5 inch iPhone with the same specs as the SE but there really isn't any demand for it.
  • Reply 3 of 52
    saareksaarek Posts: 1,105member
    Hoping they have stock by end of next week, my Mrs can't wait to upgrade her iPhone!
    pscooter63icoco3mcarlingcalimike1
  • Reply 4 of 52
    levilevi Posts: 344member
    tmay said:
    ApplePay, Apple Watch compatibility is all that it needs to be "a premium" iPhone, and the A9 gives it an extended service life.
    Looks like all that is given up is the 3D Touch.

    For the record, I do have a friend still on the iPhone 1 just because it still works for her. Had to have a new battery a couple of years ago. I still have my iPod Touch 1 which has the same screen size / configuration. I would be surprised if Apple couldn't build a 3.5 inch iPhone with the same specs as the SE but there really isn't any demand for it.
    They haven't 'given up' on 3D Touch. It's probably a cost or engineering decision. That was the implication with not including in the pro (engineering challenges) besides the fact that 3D Touch is ideal for smaller screens. Patents suggest they'll introduce a multi touch 3D display at some point, and incorporate into the home button. I suspect 3D Touch will also be apart the move to get rid of the home button all together.

    Your friend has made some interesting choices - early adopter of new type of high end phone, but using for several years past its useful lifespan. I'm sure it still does the basics, but I imagine app and web use are garbage. 
  • Reply 5 of 52
    wood1208wood1208 Posts: 1,866member
    All said here is no brainer. iphone SE is what people want and apple want in smaller iphone footprint. Apple can than upgrade it's internals like A10 in 2018 March replacement of 2016 iphone SE and continue 2-years cycle.
    OkinawaSUP
  • Reply 6 of 52
    saarek said:
    Hoping they have stock by end of next week
    Yes!!

    And, "appeasing", my ass, AI. Did you take that tone with the phablet crowd, back in 2014?  I don't recall that you did.
    mcarlingai46
  • Reply 7 of 52
    irelandireland Posts: 17,547member
    Since the day I've owned my iPhone 6 I found it too big.
    mcarlingOkinawaSUPpscooter63douglas baileybaconstangSir_Turkeychuck1252cornchipmr o
  • Reply 8 of 52
    tmaytmay Posts: 3,530member
    levi said:
    tmay said:
    ApplePay, Apple Watch compatibility is all that it needs to be "a premium" iPhone, and the A9 gives it an extended service life.
    Looks like all that is given up is the 3D Touch.

    For the record, I do have a friend still on the iPhone 1 just because it still works for her. Had to have a new battery a couple of years ago. I still have my iPod Touch 1 which has the same screen size / configuration. I would be surprised if Apple couldn't build a 3.5 inch iPhone with the same specs as the SE but there really isn't any demand for it.
    They haven't 'given up' on 3D Touch. It's probably a cost or engineering decision. That was the implication with not including in the pro (engineering challenges) besides the fact that 3D Touch is ideal for smaller screens. Patents suggest they'll introduce a multi touch 3D display at some point, and incorporate into the home button. I suspect 3D Touch will also be apart the move to get rid of the home button all together.

    Your friend has made some interesting choices - early adopter of new type of high end phone, but using for several years past its useful lifespan. I'm sure it still does the basics, but I imagine app and web use are garbage. 
    I could have used better language than "given up" when I just meant that it would be a feature that wouldn't make it into the SE.

    I have an iPad Pro, so 3D Touch is a feature that will have to wait, but it isn't a feature benefit on the same level as the pencil. Of note, I would expect a shorter pencil in the future, as pencil support is incorporated into the iPad Mini format.

    She has three daughters and a son with current iPhones, and a husband with the iPhone 5, almost all of whom are on her plan, so maybe the SE will get her to look at a current iPhone, but my guess will be she will push for 10 years of use, so 2017 looks like the year. She also has a 2005 Prius that is around 250K miles, runs like a top. Might be a pattern there.

    UPDATE:
    I was just talking to her, and her carrier, AT&T, will no longer support 2G after Dec 31 of this year, so definitely a new iPhone this year.


    edited March 2016
  • Reply 9 of 52
    JanNLJanNL Posts: 258member
    ireland said:
    Since the day I've owned my iPhone 6 I found it too big.
    That's it, Ireland. Perfect iPhone but in my daily routine to big. Eagerly waiting for a smaller iPhone.
    JamesfromDFWbaconstangmcarlingchuck1252
  • Reply 10 of 52
    if The 5C is dropped It also brings everything up to speed with touch ID and Apple Pay support. Better to do this early in 2016 than later. 
    lolliverbaconstang
  • Reply 11 of 52
    If the SE includes significantly better battery life and a larger screen (by way of home button removal) then I will upgrade from my 5S as I definitely prefer the pocket-sized, more bend-resistant 5 design over the 6's.
    6Sgoldfishchuck1252
  • Reply 12 of 52
    I wouldn't be so sure that apple would use the 6S internals in th iPhone SE. With added Apple Pay, Touch ID, and the processor and camera from the iPhone 6, the phone would better fit the profile of a $499-$549 phone.  It would then be an adequate replacement for the 5c and 5s, and an alternative to those who don't like the 4.7 inch screen size of the 6 series. But to put the A9 chip and 12 megapixel camera 
  • Reply 13 of 52
    Seems like a strange choice. The iPhone 6 internals would keep the phone cheap to make while still allowing it to be relevant for 2 more years without having to update it. The iPhone 6 is only 18 months old now, so 3 1/2 years from now would be about similar to updating a 5S today, something totally reasonable. 
  • Reply 14 of 52
    eightzeroeightzero Posts: 2,290member
    FWIW, I reached "peak iPhone" with the 5s. It is everything I need. That it works with my Apple Watch for Apple Pay has saved me a couple of update cycles already. When the 5s fails (and they don't last forever) I'd be inclined to replace it with this 5SE.
    applesidewinderbaconstangmattinozchuck1252
  • Reply 15 of 52
    rob53rob53 Posts: 2,007member
    jannl said:
    ireland said:
    Since the day I've owned my iPhone 6 I found it too big.
    That's it, Ireland. Perfect iPhone but in my daily routine to big. Eagerly waiting for a smaller iPhone.
    This is why Apple could be making the right decision at the right time. I thought the iPhone 6 was going to be too big and for awhile it was but I got used to it. My iPhone 6s with an OtterBox case makes it even bigger (thicker, taller and wider) but that's ok with me. I can now read things better and my fingers hit the right characters more often. I think the Plus size is too big but depending on what the iPhone 7/whatever-its-called includes as far as a camera, I might take a chance and go with it just for that reason. Add a good zoom lens and wider wide-angle with a good third-party handle and I could see it being used by a lot more photographers and videographers. The larger display will make it easier to focus and compose (it needs to be paired with a good app allowing focus and aperture setting for proper photography and videos. I've tried the ōlloclip lens and the only part of the photo that's sharp is the middle. 

    As for size, to each their own. Having the option is a nice idea and a great selling point for Apple. The only downside is analysts will split up the sales information of the different models and say Apple is missing projections even though the total number of iPhones sold could be much higher. Apple never wins no matter what they do, except to its customers.
    lollivernolamacguyjosha
  • Reply 16 of 52
    irelandireland Posts: 17,547member
    rob53 said:
    jannl said:
    That's it, Ireland. Perfect iPhone but in my daily routine to big. Eagerly waiting for a smaller iPhone.
    I thought the iPhone 6 was going to be too big and for awhile it was but I got used to it.

    After a year of ownership I haven't gotten used to it. I positively don't like a 4.7" device.
    baconstangmcarlingchuck1252
  • Reply 17 of 52
    wood1208wood1208 Posts: 1,866member
    It will be interesting to see iphone 5S life span left after SE is introduced. Why in a world anyone would buy iphone 5S when SE is available. My guess is iphone 5C/5S is pretty much dead.
    edited March 2016 6Sgoldfishbaconstangmcarling
  • Reply 18 of 52
    mac_128mac_128 Posts: 3,399member
    tmay said:

    UPDATE:
    I was just talking to her, and her carrier, AT&T, will no longer support 2G after Dec 31 of this year, so definitely a new iPhone this year.


    I also have a friend using a 1g iPhone. He's using it unlocked on T-Mobile. So even if ATT drops 2g the phone will still be functional on T-Mobile. So she could switch her entire family over to a new plan and keep using her original iPhone, and T-mobile has much better deals currently than ATT. My original iPhone still works great! No reason to ditch it as long as somebody still supports it.
    edited March 2016 lolliverai46
  • Reply 19 of 52
    paxmanpaxman Posts: 4,594member
    If the SE includes significantly better battery life and a larger screen (by way of home button removal) then I will upgrade from my 5S as I definitely prefer the pocket-sized, more bend-resistant 5 design over the 6's.
    I doubt if the screen will be 'significantly' bigger. I'd have thought it more likely the phone be shorter if it comes without the home button. If the home button is removed (I doubt it) and the screen size increased you are talking new aspect ration and I find that possibility unlikely. But as far as battery life it must be significantly better than the 5s which absolutely sucks. Since the 9 upgrade I have seen significant battery loss. The phone kept cutting out at any temperature below -5c (ish), so I had it replaced by Apple recently. Apart from the fact that it no longer cuts out the battery life still stinks.
  • Reply 20 of 52
    Hm because Apple is looking for a half-boiled retort to Wall Street's patronising, ludicrous sales projections. I find the 4,7" screen size ideal -myself and about 9.000 other users on a poll ran by The Verge last February, where 4" was the minority vote by the way. The form factor could be significantly trimmed by reducing those fat bezels, some of the largest compared to other current-gen smartphones in the market. Why doesn't Apple just do that? Here's the question the article should be asking. 
    edited March 2016
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