Why Has Apple Kept Its Cheapest Phone?
Apple’s latest flagship phone has pushed the limits of what the mass market will consider paying for a smartphone – the iPhone X starts from A$1579 – however, the company also revealed it would be keeping its cheapest phone, the iPhone SE, in circulation.
In addition, the company revealed it would be dropping the SE’s price from US$399 to US$349.
Apple’s iPhone X is significantly more expensive than its last flagship phone, the iPhone 7, and is a large shift away from its predecessors. By comparison, the newly unveiled iPhone 8 and iPhone 8 Plus offer minor updates, though do feature ‘premium pricing’ as well, ranging from A$1079 to A$1479.
The iPhone SE was already the most affordable of any new iPhone when it was released last year and according to Apple’s website and displays at the recent release event, it will remain on the market. Currently, Australian consumers can purchase the device for $679, or $449 if purchased as part of a Telstra pre-paid bundle.
The differences significantly broaden the pricing spectrum across the Apple iPhone range.
Analysts such as Bernstein analyst, Toni Sacconaghi predicted that Apple would keep the iPhone 6 and SE in circulation. The company decided to axe the iPhone 6 in favour of the 6S and SE.
Interestingly, some analysts are considering why of any sixth generation iPhone, the company decided to keep a simple, smaller phone in its lineup. Consensus is, the company isn’t just expanding to the higher end of smartphone pricing but is betting on the entire suite of its product offering.
The Californian-based company also released its cheapest new iPad this year.
Though the iPhone SE rarely impresses passionate tech enthusiasts, it does seem to a be strategic business choice for Apple.
The affordably priced iPhone SE shielded Apple from a sour earnings outlook last American summer, as the device sold more units than Wall Street expected. The assembly of the smartphone in India also helped Apple break into the nation’s market, accessing a large population base.
Ultimately, it’s seen that by keeping the iPhone SE the move could affirm Apple commitment in India and China, where it faces strong local pricing competition.
In another demonstration of its commitment to these nations, Apple has decided to ship the iPhone X globally, instead of first to the US and then China, as it did with the iPhone 6. It suggests the company views China and India as markets worth accommodating, even if its means later release dates and a broader pricing spectrum.
Apple’s Chief Executive, Tim Cook, states of the price versatility:
“If you look across our product lines, you can buy an iPad today for under $US300. You can buy an iPhone, depending upon which one you select, for in that same kind of ballpark. And so these are not for the rich”.