Looks like Apple Inc. (NASDAQ:AAPL) has learnt its lesson and is ready to conquer the mid-segment smartphone market with the new Apple iPhone SE. According to Ming-Chi Kuo, an analyst at KGI Securities who owns a reliable track record, an off-contract Apple iPhone SE will be available with a price tag of as little as US$400.
Apple iPhone SE will reportedly sport a 4-inch retina display, 12-megapixel camera, latest A9 chipset and up to 64 GB of storage.
“The well-informed analyst continues to believe the smartphone will cost between $400 and $500 in the United States,” reports MacRumors, citing a research note to investors that was issued by Kuo on Friday.
The new revelation, especially the specification, has surprised many. Apple iPhone SE, reportedly going to be available at half of the price of iPhone 6S, will offer the same camera and processor like its most recent siblings. The only major elements that differentiate it from the iPhone 6 series is the screen size and 3D touch. The 4-inch screen size may be a bit small considering a lot more activities are happening through smartphones these days but at the price tag of anything less than $500 Apple iPhone SE could take the market by storm.
The new iPhone will look a lot like iPhone 5S but offers a better performance and great specs at an attractive price. Kuo also reports that Apple is all set to cut the price of iPhone 5S by half after the launch of new iPhone SE.
Apple iPhone SE: Targets Entry and Mid-Segment Smartphone Market
While the new Apple iPhone SE may be missing many latest technologies, ie. 3D touch, it will still be able to pose a tough competition to other devices available in the segment. A 12-megapixel camera, latest A9 chipset, 1,642mAh battery and a 4-inch curved retina display and on top of that Apple logo are quite enticing enough for the buyer’s eye sub-$450 segment.
But, if Kuo is correct with price estimation, Apple is trying to kill two birds with a single stone: By offering a comparatively smaller size 4-inch iPhone for anything between $400 and $500 it is eyeing on the growing mid-segment smartphone market. And, by lowering the price of iPhone 5S, sporting the similar size of display but older specs, up to $250 it’s trying to capture a sizable share of the sub-$200 smartphone market – the fastest growing smartphone market ever.
Have a look on below figures that help us understand what Apple is up to and Why:
In 2015, Apple sold 231 million units of iPhone, capturing 16.2% of the worldwide smartphone market. The company, though, recorded 20.2% growth year-over-year the figure looks minuscule when compared with the growth figures of Huawei, Lenovo, Xiaomi who clocked 44.3%, 24.5% and 22.8% respectively during the same year. Most of these company’s growth, including Apple, is primarily driven by emerging markets, especially Asian countries India and China. The sales of iPhone in India were up by 76% in 2015.
However, Apple is able to foresee the shifting market trends, especially in the emerging markets, such as India. These markets are showing signs of slow down in premium segment smartphones. New entrants Xiaomi along with Huawei and Lenovo are aggressively pursuing the markets with budget smartphones that are equally powerful like high-end smartphones. In India, about 71% of smartphone shipped in 2015, belonged to sub-$200 category. Consequently, big fishes of the markets, likes of LG and Sony, are forced to withdraw from the lower segment.
While the smartphone market in US and China is saturating, India and Africa are the only promising sizable markets manufacturers can look at. Out of a 1.04 billion mobile phone subscribers in India, only 239 million use smartphones and the next billion of smartphone users are certainly coming from India. However, being a price sensitive market, Apple can’t grab a sizable chunk of the pie only by targeting the premium segment.
Final Thought
If Apple is able to offer the new iPhone SE for less than $450, along with the reduced price of iPhone 5S down to $250, in emerging markets, it could be the path-breaking strategy for the company who never believed in targeting lower segment smartphone market. The brand value of Apple and lust to hold an iPhone in the palm is much greater than anything else being offered by any other smartphone brand. In the era of fast changing needs and requirements, we don’t vouch for three generation old iPhone 5S but iPhone SE is a steal deal if at all it’s price tagged with anything lesser than $450.
