“One of the major themes of SE media coverage has been the argument advanced by many that it doesn’t really matter how it performs since it’s a budget product. Apple’s real test, the argument goes, will be to create a true ‘wow’ product in September,” Max Greve writes for Seeking Alpha. “I cannot offer any new clarity about sales performance, but I can say that this last is completely wrong. The fact that iPhone SE is so different from other iPhones is precisely why it’s so important.”
“The iPhone has long been the workhorse of Apple, accounting for 66% of total revenue. And because it has been such a reliable profit machine, it has essentially been on autopilot for years. This is not a shot at CEO Tim Cook, whom so many seem to love to belittle as being ‘not Steve Jobs,'” Greve writes. “In my opinion, Cook has done an admirable job trying to fill some almost impossibly big shoes after his old boss died.”
“For the first time, Apple will launch a non-flagship product with flagship-level internals. Joswiak made a point of emphasis that the new SE has the same graphics and computing power as the 6S, and the camera also is 6S level. Apple Pay is included as well. Aside from a slightly older Touch sensor, the SE basically is the 6S, just in a smaller shell,” Greve writes. “These changes also all point to one other big change. By taking a thicker body with a smaller screen like the 5S model and pairing it with power-sipping internals that were made for the 6S, Apple has produced a device with a substantial leap in battery life. And perhaps the most surprising thing was price. After charging $550 for a plastic iPhone with old chips just two years ago, Apple cut the price of an aluminum iPhone with cutting-edge internals to just $400.”
“The bad news of this ‘fire everything’ approach is that even if it works, Apple will still not know why it worked,” Greve writes. “If iPhone SE sales do come in strong, were they strong because of the form factor, the price cut, or the internal upgrades? All three? Two of the three? Which two? Would a $550 iPhone SE have done just as well, or close enough to make it more profitable? How about a slightly thicker $400 iPhone 5S, without the internal upgrades but with the battery life?”
Read more in the full article here.
MacDailyNews Take: Lots of handwringing from Greve over the iPhone SE which is really more a play for emerging markets (BRICS) than what Greve describes as a “semi-panicked” move by a “stumped” Apple. Simple user surveys will allow Apple to accurately ascertain iPhone SE users’ rating of the devices features (whether they preferred the device for true one-handed operation or because it offered longer battery life, for example.)
Apple should strive to execute annual iPhone updates, in three display sizes if the SE is successful (which we think it will be), and drop the off-year “S” model concept. Apple is certainly big enough and rich enough to do a new iPhone family each and every year. Apple should have killed the tock year “S” model idea years ago.
What’s happened with iPhone is painfully obvious: Apple was at least a year (more likely two years) late with properly-sized iPhones. When iPhone 6 and iPhone 6 Plus finally, blessedly materialized, buyers quite literally stampeded to get them. Then, when faced with such a “tough compare” this year, Apple was still sticking with their ill-conceived “S” model concept – making the tough compare much, much tougher.
The “iPhone 7” family – three models with the same case design and all with 3D Touch — comprised of the 4-inch iPhone 7 SE, the 4.7-inch iPhone 7, and the 5.5-inch iPhone 7 Plus — should have debuted last September. That would have taken care of the current tough compare with iPhone 6/Plus. Then, this year, the iPhone 8 family, again with a new case design, but now waterproof, with dual cameras, etc. would debut this September. In 2017, perhaps Liquidmetal and AMOLED will be ready go for the iPhone 9. Etcetera. No more “S” years, Apple. Duh.
Had Apple done as we’ve just described, they’d have sold millions more iPhone units this year and millions upon millions more each year going forward.
Apple’s raison d’être is to delight customers. “S” model “tock” year iPhones do not delight customers in the same way as new “tick” year models. Obviously. They’re still the best smartphones on the planet, but they’re just okay. A bit of a meh. We all know that “S” models exist so Apple can wring out nice margins from existing designs and tooling, not expressly to delight customers. When Apple strays from its main goal is when things get wobbly. Just delight customers, Apple, and the world will beat a path to your door.
If we didn’t work for MacDailyNews, we’d have skipped the iPhone 6s Plus and held onto our iPhone 6 Plus units with no qualms – and we’re the most rabid Day One iPhone buyers you’ll ever find. Why have an annual iPhone upgrade program, if you’re not going to wow us annually with new iPhones?