Apple Inc. (NASDAQ:AAPL), a name that is familiar to anyone who has ever heard of smartphones, let alone iPhones. Yet for a company whose current market evaluation stands at $750 billion, the most common complaint that is levied at them is “They don’t innovate.” While there is relative truth behind that statement, sales record shows that the general public just doesn’t care. While Apple may not be the first to introduce a feature like fingerprint scanners, or 3D Touch on their iPhones, they are definitely the first ones to get it right. And while smaller form factor devices similar to current flagships are nothing new in the smartphone industry, Apple may be the first to get it right! The new 4-inch iPhone may not innovate, but it has certainly invigorated a genre that has till now seemed like an after-thought for most companies.
There is a reason why people have clamoured for bigger screens on their phones. In a media-centric world, we use our smartphones for most of our entertainment needs and having a large screen to consume content on makes it so much better. In fact, one of the reasons of the phenomenal success of Apple in Q1 2015 was the result of the launch of the iPhone 6 Plus with a larger display. One iteration later, the new iPhone 6s and iPhone 6s Plus comes with improved hardware, and screens that are more in tune with the flagships of the current gen. But Apple looks to be going back to its roots and recreating the glory of the 5s with a 4-inch device but with updated specs. Surprised? We were as well, and hence we decided to look into the matter a little closer.
The 4-inch iPhone: What the Rumors Say
Bigger is always better, right? Well, not if Apple has a say about it. Latest rumours point out that Apple is looking to start off 2016 with a new smartphone launch. Now, Apple is not like Google that they’ll make radical decisions just for the sake of an experiment. So let’s take a look at the expected spec sheet of the 4 inch iPhone mini and see if we can glean any more information about Apple’s intended market.
According to latest reports by KGI Securities analyst Ming-Chi Kuo, the new iPhone is not a reiteration of the iPhone 5c, Apple’s attempt at making a cheaper and affordable iPhone, which largely proved to be a bust. It is more of an upgraded iPhone 5s, borrowing internals from this year’s iPhone 6s and iPhone 6s Plus models. However, to differentiate it from its elder brothers, the smaller iPhone will not get 3D Touch technology. The Apple A9 chip and 2 Gigs of RAM will run the show, and the software side will be handled by iOS 9.
So how does Apple expect to sell 20 to 30 million of the 4-inch iPhone in the calendar year? We delve inside the minds of the consumers and analyse the thoughts that have gone into the development of a 4-inch smartphone in today’s social-media obsessed world!
Why This Small Phone Can Deliver a Big Punch
The mini-trend has been going on for quite a while with multiple OEMs on Android’s side jumping onboard. However, the initial response for these devices hasn’t been that great with the Samsung’s S5 mini and HTC’s One Mini 2 both failing to woo the market. The main reason for their failure can be summed up in two main points.
- There were hardware tradeoffs that made the device seem like just another midrange device and not a compact version of a flagship device.
- The pricing was way too high for the hardware specs being offered.
Apple made the same mistake with their iPhone 5C, and from the looks of it, they seem to have learnt from that. So here we look at why the new iPhone even with a tiny 4-inch display, makes a ton of sense.
The Price Point
If we take a look at the price of the iPhone 6s Plus, we can clearly see that the priciest component is the screen. Now with the new iPhone being smaller and having a 4-inch screen, we can safely assume that the price of the new device will come down. The iPhone 5s in its time had a display that cost nearly $41, with prices in technology falling we can expect an even lower price for the 4-inch panel in today’s time. While a detailed breakdown of the iPhone 6s plus was done before, we can expect the smaller iPhone to cost in the range of $210 with price drops coming mainly in the way of touchscreen and smaller battery and lower costs for a smaller body.
The Price Point and The Target Markets
While the earlier iPhones had been priced as much as 3 times above the manufacturing costs, Apple may decide to cut their profit margins this time. The reason behind this is primarily due to the fact that Apple is losing its market share in its home market of US and needs to capture new markets in order to continue their growth. Along with this, there have been reports that sales numbers of iPhone 6s and 6s Plus have been disappointing primarily due to the fact that there is nothing really unique in these devices. As US and China, two of Apple’s highest consumer markets shows signs of saturation, Apple finds themselves competing with Android for market share in a newer price sensitive markets like India and Africa.
Bolstered by their recent success of $1 billion sales in India, this is a mammoth opportunity for Apple to capture the mid-range market in these countries with a device priced around $400. This could provide Apple fans to have the authentic iOS experience at a much more wallet-friendly price point. The craze among Indians to buy the outdated iPhone 4s at a price tag of about $210 bears testimony to the fact that a middle of the road iPhone with a smaller screen and up to date specs will take the midrange market by storm.
Addressing the Consumer Demand
In a study done to rate the one hand usability of the two best-selling phones in the market, researchers found that the average man and average women had difficulty reaching all areas of the screen with one hand. This study performed on the iPhone 6 and the Galaxy S6, holds just as well for the current set of iPhone 6s as well with the screen size of 4.7 inches remaining unchanged.
While Apple tried to remedy the issue with the ‘Reachability’ feature for the iPhone 6 and iPhone 6 Plus, but they might try to go back to their roots and test the waters again with a phone that can be easily operated with one hand.
While the smaller 5s and 6 variants of the iPhones have an overwhelming majority of the total number of devices, in the app section we find that games and photos are at top, This could mean that an iPhone with a smaller screen and upgraded camera could go down very well with most iPhone users as apps that need large screens like Social Media are languishing at the bottom of the list of most downloaded apps.
Making a 4-inch device might seem counter-intuitive at first sight with the majority of the smartphone industry headed towards the ‘bigger is better‘ fad. However careful analysis of Apple’s market and user usage patterns reveals the shocking truth that there is in fact still a sizeable chunk of the market that is looking for a smaller device that is easily accessible and usable with one hand. With a lower pricing and stellar Apple hardware inside, this could also help Apple draw in the Apple fan from the emerging markets.
Steve Jobs once famously said, that making a phone so big
“you can’t get your hand around it”
was folly on the part of other rivals and we, at Dazeinfo feel, there might be a sizable chunk of the population who’d still believe so. All said and done, the success of the rumored 4-inch iPhone is pegged to the Price, which depends how much hit Apple is willing to take in order to capture smartphone market of developing marketers.