Apple eyeing $399 'iPhone SE 2' launch in March

AppleInsider · February 8, 2020 5:01PM

Apple is said to be ramping up production of a new low-cost iPhone model with a view to a launch in March, with the potential "iPhone SE 2" or "iPhone 9" anticipated to be sold at the same price as the original iPhone SE.

In a continuation to ongoing rumors and analyst speculation over the possible launch of the "iPhone SE 2," a new report insists that a new value-oriented iPhone is on the horizon, and will be launching soon. In the latest installment of the small iPhone saga, it is suggested Apple is getting its supply chain going for its production.

According to sources of Fast Company, parts production for the model is increasing in capacity, which lends itself to the repeatedly suggested March launch for the model. One source believes the price of the model could be $399, which would be the same as the cost of the original iPhone SE.

The model will take a similar approach to the original in relying on existing components Apple has years of experience in using, it is claimed. A switch from Touch ID to Face ID is unlikely for the model, while the physical design could involve using a 4.9-inch display and borrow its appearance from the iPhone 8.

Other rumors have speculated the use of a 4.7-inch display, Touch ID, current-generation camera technology, and the use of the A13 Bionic for processing. There has also been some suggestion of the launch of two low-cost models in 2020, along with a large-screen version in 2021.

The report's source pointed towards Apple's motivations behind the model as one to help it tap into markets where its existing roster cannot, such as in the Indian market and younger users. The low-cost device may also help bolster Apple's share in China, the source believed.

avon b7 · February 8, 2020 6:24PM

It would be an intelligent move and cover the lower end very well. There are lots of people who cannot afford where Apple has gone on pricing for new phones since iPhone X. Late last year they vastly improved the offering by making the the iPhone 11 more affordable than the model it replaced and hacking the price of the iPhone XR when it moved down a tier.

An iPhone SE2 would be the culmination of that trend.

fatman · February 8, 2020 7:12PM

Smart move. With price points from $399 (rumored) to $1099, there should no longer be an excuse for people to say iPhone is too expensive, it will also open market to India and other price sensitive markets - Yes, the lower price models will sacrifice higher end features, but thankfully Apple tends to offer the latest processors across the newly launched models - very important to keep OS and software compatibility across all models. We can also assume that RAM will start at 64GB, which is a comfortable starting point.

curtis hannah · February 8, 2020 7:52PM

God it odd Ale would wait a full four years for a replacement to the SE, but it would be gladly welcomed to the lineup.

cornchip · February 8, 2020 8:05PM

Too bad it will be humongous. The smallest version of the new phones this fall rumored to be only a few mm bigger than 5/5s/SE in either direction which could be a nice compromise.

henrybay · February 8, 2020 8:33PM

It’s great that at least one iPhone will keep using Touch ID.

clarker99 · February 8, 2020 9:43PM

So, the iPhone 8 starts at $449. Meanwhile, this 2.5yr newer iPhone SE is gonna be packed with the A13, updated to current camera tech and will start at $399? Sounds suspicious to me.

hoodjd73 · February 9, 2020 1:40AM

iPhone 8 will be discontinued with the release of iPhone 9.

georgebmac · February 9, 2020 1:45PM

avon b7 said:

It would be an intelligent move and cover the lower end very well. There are lots of people who cannot afford where Apple has gone on pricing for new phones since iPhone X. Late last year they vastly improved the offering by making the the iPhone 11 more affordable than the model it replaced and hacking the price of the iPhone XR when it moved down a tier.

An iPhone SE2 would be the culmination of that trend.

As a former cost accountant and analyst I would love to see the numbers behind building a phone with state of the art internals and software - the same guts - (but using older features like screen and camera) yet selling it for about a quarter as much (27%) as the flagship phone. It's like selling a Porsche in a Chevy body for Chevy prices.

Is the margin on the flagship so flagrantly higher?

Is the margin on the SE2 so very, very low?

.... Or is it even being sold for a loss to support some other aspect of the business?

Nobody but the internal financial managers will ever know the answer(s). And, I sincerely hope that they do know -- I have seen too many companies make similar choices without knowing those numbers and instead working off of hunches and feelings.

As an accountant and analyst I loved digging into those things and analyzing them from the ground up -- and this got my curiosity and desire to know all fired up. They make for fascinating analysis, especially when volumes are impacted and idle resources brought into play. Often existing assumptions get turned on their head.

disneylandman · February 9, 2020 8:50PM

Stop calling it an iPhone SE2, because it clearly is not an SE2. It is an updated iPhone 6/7/8, nothing more. Nice for a low price point, but the entry model will skimp on storage.

disneylandman · February 9, 2020 8:51PM

GeorgeBMac said:

avon b7 said:

It would be an intelligent move and cover the lower end very well. There are lots of people who cannot afford where Apple has gone on pricing for new phones since iPhone X. Late last year they vastly improved the offering by making the the iPhone 11 more affordable than the model it replaced and hacking the price of the iPhone XR when it moved down a tier.

An iPhone SE2 would be the culmination of that trend.

As a former cost accountant and analyst I would love to see the numbers behind building a phone with state of the art internals and software - the same guts - (but using older features like screen and camera) yet selling it for about a quarter as much (27%) as the flagship phone. It's like selling a Porsche in a Chevy body for Chevy prices.

Is the margin on the flagship so flagrantly higher?
Is the margin on the SE2 so very, very low?
.... Or is it even being sold for a loss to support some other aspect of the business?

Nobody but the internal financial managers will ever know the answer(s). And, I sincerely hope that they do know -- I have seen too many companies make similar choices without knowing those numbers and instead working off of hunches and feelings.

As an accountant and analyst I loved digging into those things and analyzing them from the ground up -- and this got my curiosity and desire to know all fired up. They make for fascinating analysis, especially when volumes are impacted and idle resources brought into play. Often existing assumptions get turned on their head.

They have an extremely high margin, which is why they are making billions.

disneylandman · February 9, 2020 8:53PM

henrybay said:

It’s great that at least one iPhone will keep using Touch ID.

TouchID is lousy. Gloves, can't use it. Do any physical labor with your hands scuffing up your fingers, can't use it. Dirty sensor, can't use it. FaceID...just look at it and it unlocks every time. Way more convenient.

georgebmac · February 9, 2020 11:15PM

disneylandman said:

henrybay said:

It’s great that at least one iPhone will keep using Touch ID.

TouchID is lousy. Gloves, can't use it. Do any physical labor with your hands scuffing up your fingers, can't use it. Dirty sensor, can't use it. FaceID...just look at it and it unlocks every time. Way more convenient.

... and more secure.

I thought Apple was headed that way across the board. Fooled me!

macgui · February 10, 2020 8:34AM

hoodjd73 said:

iPhone 8 will be discontinued with the release of iPhone 9.

disneylandman said:

Stop calling it an iPhone SE2, because it clearly is not an SE2. It is an updated iPhone 6/7/8, nothing more. Nice for a low price point, but the entry model will skimp on storage.

What they said, plus– it'll be called an iPhone 9. But in March? Can't wait!

muthuk_vanalingam · February 10, 2020 9:19AM

GeorgeBMac said:

avon b7 said:

It would be an intelligent move and cover the lower end very well. There are lots of people who cannot afford where Apple has gone on pricing for new phones since iPhone X. Late last year they vastly improved the offering by making the the iPhone 11 more affordable than the model it replaced and hacking the price of the iPhone XR when it moved down a tier.

An iPhone SE2 would be the culmination of that trend.

Is the margin on the flagship so flagrantly higher?
Is the margin on the SE2 so very, very low?
.... Or is it even being sold for a loss to support some other aspect of the business?

My guess is that the reality sits somewhere in between your statements 1 & 2. I don't think Apple opts for the 3rd option.

lkrupp · February 10, 2020 2:03PM

If this is true then my opinion is that Apple is tugging the tail of the tiger. If a $399 iPhone starts cannibalizing the premium line then sales might increase but margins will collapse. Apple will be reduced to chasing the lowest common denominator like all the other wannabes. As we all know Apple consistently takes the majority of profits from the smartphone market because of its margins. I personally don't want an el cheapo iPhone sullying the brand.

Potential customer: I like the price of this iPhone. I've seen the ads about all the amazing things and iPhone can do.

Salesman: Yeah, well, this model can't do any of that. It has a cheaper camera, lower screen resolution, less memory...

edited February 2020

georgebmac · February 10, 2020 2:27PM

lkrupp said:

If this is true then my opinion is that Apple is tugging the tail of the tiger. If a $399 iPhone starts cannibalizing the premium line then sales might increase but margins will collapse. Apple will be reduced to chasing the lowest common denominator like all the other wannabes. As we all know Apple consistently takes the majority of profits from the smartphone market because of its margins. I personally don't want an el cheapo iPhone sullying the brand.

Potential customer: I like the price of this iPhone. I've seen the ads about all the amazing things and iPhone can do.

Salesman: Yeah, well, this model can't do any of that. It has a cheaper camera, lower screen resolution, less memory...

The flip side of that is that the smart phone market is maturing and evening out -- just as the PC market did

From a hardware standpoint, for the most part, there isn't a huge difference between vendors.

From a marketing standpoint, there are (to over simplify), three main areas for them to compete in:

1) The low end where they are missing out on literally tens or hundreds of millions of potential customers. Apple attempted to pull them in with the SE and production of the iPhone 6 in India. But I never heard of any notable success in that area.

2) The middle ground -- they seem to be doing pretty well in this area with the iPhone Xr and 11.
3) The high end -- from a hardware standpoint they are barely holding their own. As soon as they come out with a new, upgraded phone, Samsung comes out with another that matches or exceeds its specs. Currently, with foldable and 5G enabled phones, Samsung appears to be the leader.

But, where they stand head and shoulders above all others is their software and ecosystem. Nobody but nobody is in even in the same league. But there is something unique about that: It doesn't matter if they sell one phone, a million, or a billion the total cost remains essentially the same for their star products: software and ecosystem.

,,, So, the more phones they sell the less that costs them on a per unit basis.

From that standpoint a $399 phone (or less) makes enormous sense: It opens the door to the low cost market (especially if they discount it) and it amortizes the fixed costs of their software and ecosystems.

eightzero · February 10, 2020 7:07PM

lkrupp said:

If this is true then my opinion is that Apple is tugging the tail of the tiger. If a $399 iPhone starts cannibalizing the premium line then sales might increase but margins will collapse. Apple will be reduced to chasing the lowest common denominator like all the other wannabes. As we all know Apple consistently takes the majority of profits from the smartphone market because of its margins. I personally don't want an el cheapo iPhone sullying the brand.

Potential customer: I like the price of this iPhone. I've seen the ads about all the amazing things and iPhone can do.

Salesman: Yeah, well, this model can't do any of that. It has a cheaper camera, lower screen resolution, less memory...

Haha. No chance a salesperson ever says that. More like, "what color would you like?"

I do get your point though. More likely plays out like this:

Potential Customer: "I see you got an elCheapo iPhone. I've seen the ads about all the amazing things and iPhone can do."

Duped Customer: "Apple sucks, iPhone sucks. the elCheapo doesn't do anything like those ads, and they never tell you that. The whole company is a fraud, That's how they got so rich. You wind up buying and then the thing stops working for no reason. I'm getting one of those nice Huawei phones everyone likes when this one stops working in 5 years like they always do."

gatorguy · February 10, 2020 7:23PM

macgui said:

hoodjd73 said:

iPhone 8 will be discontinued with the release of iPhone 9.

disneylandman said:

Stop calling it an iPhone SE2, because it clearly is not an SE2. It is an updated iPhone 6/7/8, nothing more. Nice for a low price point, but the entry model will skimp on storage.

What they said, plus– it'll be called an iPhone 9. But in March? Can't wait!

That's when some other companies tend to release their mid-range phones, approx. 6 months give or take after the flagship. For example you'll see a Pixel 4a or whatever they call it about that same time. Samsung has a phone event about mid-February too. Spring brings new smartphones and Apple's sales should benefit from a first calendar update. By then the flagship excitement has had it's run.

edited February 2020

digitol · February 10, 2020 8:13PM

I really like the smaller phones. One handed operation is super important. Long live Touch ID! Face ID is a complete disaster! Just awful. It often fails at recognizing, and thus causing one to try on multiple events to try and simply use their phone. Terrible. Especially for trained assassins like me (men with no face) often our disguises render the iPhone Face ID completely useless! How am I supposed to work with this!? How is anyone!? Just simply another tech by Apple that doesn't work. Sad. So I'm hopeful the SE2 or whatever it's called will keep to the tech that actually works!

grayeagle · February 13, 2020 5:09PM

As someone with arthritic fingers, I never activated the TouchID capability in my SE and 8. I just manage to hit the Home button, or ask someone to do it for me, to turn on the phone.

I had two SEs, but traded one for an 8, due to better voice transmission and reception. I can live with an SE2/9/whatever, but find it rather difficult to use my fingers on my daughter's 11.

Apple eyeing $399 'iPhone SE 2' launch in March

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