When Apple moved to large display iPhones, they routinely kept an older four-inch model in stock. In large part, this was to offer an alternative for people who couldn’t afford the flagship versions, although it’s also true that some people never liked the larger handsets.
Regardless, Apple evidently didn’t take the smaller form factor seriously. It was all about iPhones with 4.7-inch and 5.5-inch displays. Aside from the iPhone 5s, they previously sold the iPhone 5c, a plastic-cased version of the iPhone 5. In the scheme of things, they were decent enough, and the latter appears to have been far more successful than the chronic Apple critics claimed.
So when Apple released the iPhone SE earlier this year, you can believe some were skeptical. Basically, it replaced the iPhone 5s in essentially the same case, but sporting most of the guts of the iPhone 6s. That meant for superior performance on a par with the larger model, more or less, except for the lack of 3D Touch. That’s no big deal so far as I’m concerned.
For an iPhone, the price was quite aggressive, starting at $399 for the 16GB model. A 64GB version is $100 more. Carriers that still had those two-year contracts would likely offer the base model free, and Apple advertises monthly financing starting at $16.63 per month. So this is definitely an affordable deal.
Now the tech pundits really didn’t take it seriously, but that changed when it turned out that Apple was chronically back ordered. This situation persisted for weeks. Evidently Apple severely underestimated potential demand, but the surprise success of the iPhone SE clearly helped boost sales in the June quarter to a point where the decrease wasn’t quite as bad as expected.
Here’s an example of how well the smaller iPhone is doing. There’s a new report indicating it’s responsible for growing Apple’s smartphone market share in the UK, according to surveys from Kantar WorldPanel ComTech. Believe it or not, the iPhone SE is the UK’s best-selling smartphone, and it’s outpacing the iPhone 6s, but just barely, and the Samsung Galaxy S7. The market share was listed at 9.2% for the second quarter, compared to 9.1% for the iPhone 6s. Overall, the iPhone’s share of the market amounted to 37.2%, up from 34.1% in the year-ago quarter, a surprising degree of growth very much due to the presence of the smaller iPhone.
According to the survey, the iPhone has a 31.8% share in the U.S. and an 18.2% share in what’s regarded as the five largest markets in Europe other than the UK.
However, Windows Phone is crashing. Market share is 4.9% in the UK, compared to 11.3% for the year-ago quarter. BlackBerry is also tanking, dropping from 1.2% to 0.6%. The prospects for either platform appear to be slim to none.
In any case, the iPhone SE appears to be an important object lesson for Apple. With the proliferation of large smartphones, Apple evidently succumbed to the meme that customers didn’t want small anymore. But that’s clearly not so.
I recall the pitch Apple delivered before the iPhone 6 arrived, as Worldwide Marketing VP Philip Schiller demonstrated at a keynote how the smaller handset was far more convenient for one-handed use. Sure, it was an excuse at the time for the lack of a larger model, but he was also correct. While I don’t mind the iPhone 6 form factor, I can see where it’s impractical for some users. My wife, for example, uses small purses in her travels, and thus would find a larger smartphone to be an inconvenience. She uses an iPhone 5c.
One of my friends and colleagues, blogger and podcaster Kirk McElhearn, who is also a feature writer for Macworld, originally purchased an iPhone 6, but found its larger size to be inconvenient for his needs. He returned it and stayed with his iPhone 5s. When the iPhone 6s came out, he bought one mainly to be up to date with the technology, but has since settled on the iPhone SE.
Of course, small is not for everyone. As I said, I have an iPhone 6 and, as I consider whether it makes sense to upgrade to an iPhone 7, I find the mid-sized form factor perfect for my needs. An iPhone 6 Plus phablet would have been difficult to manage for rapid removal from my pant’s pocket. What I have seems well suited to my needs. Indeed, I seldom bother with my wife’s 9.7-inch iPad. I use it most often to help her solve a problem with Facebook, which constantly irritates her. But, as I’ve written previously in these columns, the iPad lacks support for the type of apps I need for my work.
In any case, I’m curious to see how the iPhone SE influences pricing and marketing of the next iPhone. Will it be succeeded by a four-inch iPhone 7, or will Apple simply keep it in the product lineup till next year? What about the price? Will Apple also cut the price of the high-end models based on the marketing plan for the iPhone SE? Even a $50 reduction might be sufficient to really fuel sales.